Date July 2008 STAR BULK CARRIERS CORP. as Borrower - and - PIRAEUS BANK A.E. as Lender LOANLOAN AGREEMENT
Exhibit
10.23
Date July
2008
as
Borrower
- and
-
PIRAEUS
BANK A.E.
as
Lender
relating to a loan facility of up to US$35,000,000
to part
finance the acquisition cost of
m.v.
“VICTORIA” (tbr “STAR COSMO”)
XXXXXX,
XXXXXX & XXXXXXXX
Piraeus
INDEX
Clause
|
1
|
INTERPRETATION
|
1
|
|
2
|
FACILITY
|
13
|
|
3
|
DRAWDOWN
|
14
|
|
4
|
INTEREST
|
14
|
|
5
|
INTEREST
PERIODS
|
15
|
|
6
|
DEFAULT
INTEREST
|
16
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
17
|
|
8
|
CONDITIONS
PRECEDENT
|
18
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
19
|
|
10
|
GENERAL
UNDERTAKINGS
|
21
|
|
11
|
CORPORATE
UNDERTAKINGS
|
24
|
|
12
|
INSURANCE
|
26
|
|
13
|
SHIP
COVENANTS
|
31
|
|
14
|
SECURITY
COVER
|
34
|
|
15
|
PAYMENTS
AND CALCULATIONS
|
35
|
|
16
|
APPLICATION
OF RECEIPTS
|
36
|
|
17
|
APPLICATION
OF EARNINGS
|
37
|
|
18
|
EVENTS
OF DEFAULT
|
38
|
|
19
|
FEES
AND EXPENSES
|
41
|
|
20
|
INDEMNITIES
|
42
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
44
|
|
22
|
ILLEGALITY,
ETC
|
45
|
|
23
|
INCREASED
COSTS
|
45
|
|
24
|
SET
OFF
|
46
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICE
|
47
|
|
26
|
VARIATIONS
AND WAIVERS
|
48
|
|
27
|
NOTICES
|
48
|
|
28
|
SUPPLEMENTAL
|
50
|
|
29
|
LAW
AND JURISDICTION
|
50
|
|
SCHEDULE
1 DRAWDOWN NOTICE
|
52
|
|
| SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS | 53 | |
| SCHEDULE 3 FORM OF COMPLIANCE CERTIFICATE | 56 | |
|
EXECUTION
PAGE
|
57 | |
THIS AGREEMENT is made
on July 2008
BETWEEN
|
(1)
|
STAR BULK CARRIERS CORP.
as Borrower; and
|
|
(2)
|
PIRAEUS BANK A.E. as
Lender.
|
BACKGROUND
The
Lender has agreed to make available to the Borrower a loan facility of up to
$35,000,000 (being approximately 55 per cent. of the purchase price of the Ship
payable pursuant to the MOA) for the purpose of assisting the Owner, a
wholly-owned subsidiary of the Borrower, in part-financing the purchase price of
the Ship.
IT IS AGREED as
follows:
|
1
|
INTERPRETATION
|
|
1.1
|
Definitions. Subject
to Clause 1.5, in this Agreement:
|
“Account Pledge” means a deed
creating security in respect of the Earnings Account in such form as the Lender
may approve or require;
“Accounting
Information” means the annual audited consolidated accounts to
be provided by the Borrower to the Lender in accordance with Clause 10.6(a) of
this Agreement or the semi-annual unaudited accounts to be provided by the
Borrower to the Lender in accordance with Clause 10.6(b) of this
Agreement;
“Approved Manager” means Star
Bulk Management Inc., a corporation incorporated in the Republic of the Xxxxxxxx
Islands having its registered office at Trust Company Complex, Ajeltake Road,
Ajeltake Island, Majuro, Xxxxxxxx Islands MH96960, or any other company which
the Lender may, from time to time, approve as the manager of the
Ship;
“Availability Period” means the
period commencing on the date of this Agreement and ending on:
|
|
(a)
|
30
July 2008 (or such later date as the Lender may agree with the Borrower);
or
|
|
|
(b)
|
if
earlier, the date on which the Commitment is fully borrowed, cancelled or
terminated;
|
“Borrower” means Star Bulk
Carriers Corp., a corporation incorporated and existing under the laws of
Xxxxxxxx Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000;
“Business Day” means a day on
which banks are open in London, Piraeus and Athens and, in respect of a day on
which a payment is required to be made under a Finance Document, also in New
York City;
“Charterer” means
Korea Lines Corporation of Seoul, Korea;
“Charterparty
Assignment” means an assignment of the rights of the Owner
under the Initial Charterparty or, as the case may be, any Future Charterparty
executed or, as the context may require, to be executed by the Owner in favour
of the Lender, in each case, in such form as the Lender may approve or
require;
“Commitment” means $35,000,000,
as that amount may be reduced, cancelled or terminated in accordance with this
Agreement;
“Compliance Certificate” means
a certificate in the form set out in Schedule 3 (or in any other form which the
Lender approves or requires);
“Compliance
Date” means 31 March, 30 June, 30 September and 31 December in
each calendar year (or such other dates as of which the Borrower prepares its
consolidated financial statements which it is required to deliver to the Lender
pursuant to Clause 10.6);
“Contract
Price” means $68,800,000 being the purchase price for “STAR
COSMO” payable by the Owner to the Seller pursuant to the MOA;
“Contractual Currency” has the
meaning given in Clause 20.4;
“Dollars” and “$” means the lawful currency
for the time being of the United States of America;
“Drawdown Date” means the date
requested by the Borrower for the Loan to be made, or (as the context requires)
the date on which is actually made;
“Drawdown Notice” means the
notice in the form set out in Schedule 1 (or in any other form which the Lender
approves or reasonably requires);
“Earnings” means all moneys
whatsoever which are now, or later become, payable (actually or contingently) to
the Owner or the Lender and which arise out of the use or operation of the Ship,
including (but not limited to):
|
(a)
|
all
freight, hire and passage moneys, compensation payable to the Owner in the
event of requisition of the Ship for hire, remuneration for salvage and
towage services, demurrage and detention moneys and damages for breach (or
payments for variation or termination) of any charterparty or other
contract for the employment of the Ship;
|
|
|
(b)
|
all
moneys which are at any time payable under Insurances in respect of loss
of earnings; and
|
|
|
|
(c)
|
if
and whenever the Ship is employed on terms whereby any moneys falling
within paragraphs (a) or (b) are pooled or shared with any other person,
that proportion of the net receipts of the relevant pooling or sharing
arrangement which is attributable to the
Ship;
|
“Earnings
Account” means an account in the name of the Owner with the
Lender designated “Star Cosmo LLC - Earnings Account” or any other account (with
that or another office of the Lender) which is designated by the Lender as the
Earnings Account for the purpose of this Agreement;
2
“EBITDA” means, in
relation to a Compliance Date or for any accounting period, the consolidated net
income of the Group for that accounting period:
|
|
(a)
|
plus,
to the extent deducted in computing consolidated net income of the Group
for that accounting period, the sum, without duplication,
of:
|
|
|
(i)
|
all
federal, state, local and foreign taxes and tax
distributions;
|
|
|
(ii)
|
Net
Interest Expenses; and
|
|
|
(iii)
|
depreciation,
depletion, amortisation of intangibles and other non-cash charges or
non-cash losses (including non-cash transaction expenses and the
amortisation of debt discounts) and any extraordinary losses not incurred
in the ordinary course of business;
|
|
|
(b)
|
minus,
to the extent added in computing consolidated net income of the Group for
that accounting period, any non-cash income or non-cash gains and any
extraordinary gains not incurred in the ordinary course of
business;
|
all
determined on a consolidated basis in accordance with generally accepted
accounting principles and as shown in the Accounting Information;
“Environmental Claim”
means:
|
|
(a)
|
any
claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or
which relates to any Environmental Law;
or
|
|
|
(b)
|
any
claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident,
|
and
“claim” means a claim
for damages, compensation, fines, penalties or any other payment of any kind,
whether or not similar to the foregoing; an order or direction to take, or not
to take, certain action or to desist from or suspend certain action; and any
form of enforcement or regulatory action, including the arrest or attachment of
any asset;
“Environmental
Incident” means:
|
|
(a)
|
any
release of Environmentally Sensitive Material from the Ship;
or
|
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released from a
vessel other than the Ship and which involves a collision between the Ship
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the Ship is actually or
potentially liable to be arrested, attached, detained or injuncted and/or
the Ship and/or the Owner and/or any operator or manager of the Ship is at
fault or allegedly at fault or otherwise liable to any legal or
administrative action; or
|
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from the Ship and in connection with which the Ship is
actually or potentially liable to be arrested and/or where the Owner
and/or any operator or manager of the Ship is at fault or allegedly at
fault or otherwise liable to any legal or administrative
action;
|
3
“Environmental Law” means any
law relating to pollution or protection of the environment, to the carriage of
Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
“Environmentally Sensitive
Material” means oil, oil products and any other substance (including any
chemical, gas or other hazardous or noxious substance) which is (or is capable
of being or becoming) polluting, toxic or hazardous;
“Event of Default” means any of
the events or circumstances described in Clause 18.1;
“Finance
Documents” means:
|
|
(a)
|
this
Agreement;
|
|
|
(b)
|
the
Guarantee;
|
|
|
(c)
|
the
Mortgage;
|
|
|
(d)
|
the
General Assignment;
|
|
|
(e)
|
the
Account Pledge;
|
|
|
(f)
|
the
Manager’s Undertaking;
|
|
|
(g)
|
any
Charterparty Assignment; and
|
|
(h)
|
any
other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, the Owner or any other person as
security for, or to establish any form of subordination or priorities
arrangement in relation to, any amount payable to the Lender under this
Agreement or any of the other documents referred to in this
definition;
|
“Financial Indebtedness” means,
in relation to a person (the “debtor”), a liability of the
debtor:
|
(a)
|
for
principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
|
|
|
|
(b)
|
under
any loan stock, bond, note or other security issued by the
debtor;
|
|
|
(c)
|
under
any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
|
|
|
(d)
|
under
a financial lease, a deferred purchase consideration arrangement or any
other agreement having the commercial effect of a borrowing or raising of
money by the debtor;
|
|
(e)
|
under
any foreign exchange transaction, any interest or currency swap or any
other kind of derivative transaction entered into by the debtor or, if the
agreement under which any such transaction is entered into requires
netting of mutual liabilities, the liability of the debtor for the net
amount; or
|
4
|
|
(f)
|
under
a guarantee, indemnity or similar obligation entered into by the debtor in
respect of a liability of another person which would fall within (a) to
(e) if the references to the debtor referred to the other
person;
|
“Fleet
Vessels” means, together, all of the vessels (including, but
not limited to, the Ship) from time to time owned by members of the Group and,
in the singular, means any of them;
“Future
Charterparty” means any time charterparty, consecutive voyage
charter or contract of affreightment in respect of the Ship (other than the
Initial Charterparty) of a duration (or capable of being or exceeding a
duration) of 11 months or more and any guarantee of such charter or other
contract of employment in respect of the Ship to be entered into by the Owner
and a charterer approved by the Lender in form and substance satisfactory to the
Lender;
“GAAP” means
generally accepted accounting principles as from time to time in effect in the
United States of America;
“General Assignment” means a
general assignment of the Earnings, the Insurances and any Requisition
Compensation of the Ship, in such form as the Lender may approve or
require;
“Group” means, together, the
Borrower, the Owner and all their respective subsidiaries and any other
companies in the same beneficial ownership as the Borrower and/or the
Owner;
“Guarantee” means a
guarantee of the Borrower’s obligations under this Agreement and the other
Finance Documents to which it is a party executed or to be executed by the Owner
in favour of the Lender in such form as the Lender shall approve or
require;
|
|
“IACS” means
the International Association of Classification
Societies;
|
|
|
“Initial Charterparty” means
the time charterparty dated 7 March 2008 in relation to the Ship made
between the Seller and the Charterer as amended and supplemented by a
novation agreement dated 5 June 2008 made between the Owner, the Seller
and the Charterer pursuant to which the Seller has novated that
charterparty in favour of the
Owner;
|
“Insurances”
means:
|
|
(a)
|
all
policies and contracts of insurance (including in respect of hull and
machinery risks), including entries of the Ship in any protection and
indemnity or war risks association, which are effected in respect of the
Ship, her Earnings or otherwise in relation to her;
and
|
|
|
(b)
|
all
rights and other assets relating to, or derived from, any of the
foregoing, including any rights to a return of a
premium;
|
“Interest Period” means a
period determined in accordance with Clause 5;
“ISM Code” means, in relation
to its application to the Owner, the Ship and its operation:
|
|
(a)
|
‘The
International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’,
adopted by the Assembly of the International Maritime Organisation by
Resolution A.741(18) on 4 November 1993 and incorporated on 19 May 1994
into chapter IX of the International Convention for the Safety of Life at
Sea 1974 (SOLAS 1974); and
|
5
|
|
(b)
|
all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by
the International Maritime Organisations pursuant to Resolution A.788(19)
adopted on 25 November 1995,
|
as
the same may be amended, supplemented or replaced from time to
time;
“ISM Code Documentation”
includes:
|
|
(a)
|
the
document of compliance (DOC) and safety management certificate (SMC)
issued pursuant to the ISM Code in relation to the Ship within the periods
specified by the ISM Code; and
|
|
|
(b)
|
all
other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require;
and
|
|
|
(c)
|
any
other documents which are prepared or which are otherwise relevant to
establish and maintain the Ship’s or the compliance of the Owner with the
ISM Code which the Lender may
require;
|
“ISM SMS” means the safety
management system for the Ship which is required to be developed, implemented
and maintained under the ISM Code;
“ISPS Code” means
the International Ship and Port Facility Security Code constituted pursuant to
resolution A.924(22) of the International Maritime Organisation (“IMO”) now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as
amended) and the mandatory ISPS Code as adopted by a Diplomatic Conference of
the IMO on Maritime Security in December 2002 and includes any amendments or
extensions to it and any regulation issued pursuant to it but shall only apply
insofar as it is applicable law in the Ship’s flag state and any jurisdiction on
which the Ship is operated;
“ISPS Code
Documentation” includes:
|
|
(a)
|
the
International Ship Security Certificate issued pursuant to the ISPS Code
in relation to the Ship within the period specified in the ISPS Code;
and
|
|
|
(b)
|
all
other documents and data which are relevant to the ISPS Code and its
implementation and verification which the Lender may
require;
|
“ISSC” means a valid
and current International Ship Security Certificate issued under the ISPS
Code;
“Lender” means Piraeus Bank
A.E. acting through its office at 00-00 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxx (or
through another branch notified to the Borrower under Clause 25.6) or its
successor or assign;
“Leverage Ratio” means, at any
relevant time, the ratio of:
|
|
(a)
|
the
Total Liabilities (less all Liquid Funds);
and
|
6
|
|
(b)
|
the
Market Value Adjusted Total Assets (including, without limitation, the
Ship);
|
“LIBOR” means, for
an Interest Period:
|
|
(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as possible equal to, the relevant Interest
Period which appears on REUTERS BBA Page LIBOR 01 at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that
Interest Period (and, for the purposes of this Agreement, “REUTERS BBA
Page LIBOR 01” means the display designated as “REUTERS BBA Page LIBOR 01”
on the Reuters Money News Services or such other page as may replace
REUTERS BBA Page LIBOR 01 on that service for the purpose of displaying
rates comparable to that rate or on such other service as may be nominated
by the British Bankers’ Association for the purpose of displaying British
Bankers’ Association Interest Settlement Rates for Dollars);
or
|
|
|
(b)
|
if
no rate is quoted on REUTERS BBA Page LIBOR 01, the rate per annum
determined by the Lender to be the arithmetic mean of the rates per annum
at which deposits in Dollars are offered to the Lender by leading banks in
the London Interbank Market at the Lender’s request of or about 11.00 a.m.
(London time) on the Quotation Date for that Interest Period for a period
equal to that Interest Period and for delivery on the first Business Day
of it;
|
“Liquid Funds” means, in
respect of the relevant period, the aggregate of cash in hand held by members of
the Group with banks or other financial institutions of at least investment
grade rating which is free of any Security Interest;
“Loan” means the principal
amount for the time being outstanding under this Agreement;
“Major Casualty” means any
casualty to the Ship in respect of which the claim or the aggregate of the
claims against all insurers, before adjustment for any relevant franchise or
deductible, exceeds $250,000 or the equivalent in any other
currency;
“Management
Agreement” means an agreement made or to be made between the
Owner and the Approved Manager in respect of the commercial and/or technical
management of the Ship to be in form and substance in every respect satisfactory
to the Lender;
“Manager’s
Undertaking” means an undertaking to be issued by the Approved
Manager agreeing certain matters in relation to the management of the Ship to be
such form as the Lender may approve or require;
“Margin” means 1.325
per cent. per annum;
“Market
Value” means, in relation to the Ship and each Fleet Vessel
the market value thereof calculated in accordance with Clause
14.4;
“Market Value Adjusted Total
Assets” means, at any time, Total Assets adjusted to reflect
the difference between the book values of all Fleet Vessels and the aggregate
Market Value of all Fleet Vessels and lease transactions relating to any Fleet
Vessels;
“MOA” means the memorandum of
agreement dated 22 May 2008 as amended and supplemented by addendum No.1 dated 1
June 2008, each entered into between the Seller and the Owner in respect of the
sale of the Ship;
7
“Mortgage” means the first
preferred Xxxxxxxx Islands ship mortgage on the Ship, in such form as the Lender
may approve or require;
“Negotiation Period” has the
meaning given in Clause 4.6;
“Net Interest
Expenses” means, as of any Compliance Date, the aggregate of
all interest, commitment and other fees, commissions, discounts and other costs,
charges or expenses accruing due from all the members of the Group during that
accounting period less interest income received, determined on a consolidated
basis in accordance with generally accepted accounting principles and as shown
in the Accounting Information;
“Owner” means Star
Cosmo LLC, a limited liability company formed in the Republic of the Xxxxxxxx
Islands and having its registered office at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000;
“Payment Currency” has the
meaning given in Clause 20.4;
“Permitted Security Interests”
means:
|
|
(a)
|
Security
Interests created by the Finance
Documents;
|
|
|
(b)
|
liens
for unpaid master’s and crew’s wages in accordance with usual maritime
practice;
|
|
|
(c)
|
liens
for salvage;
|
|
|
(d)
|
liens
arising by operation of law for not more than 2 months’ prepaid hire
under any charter in relation to the Ship not prohibited by this
Agreement;
|
|
|
(e)
|
liens
for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of the Ship, provided such
liens do not secure amounts more than 30 days overdue (unless the
overdue amount is being contested by the Owner in good faith by
appropriate steps) and subject, in the case of liens for repair or
maintenance, to Clause 13.12(h);
|
|
|
(f)
|
any
Security Interest created in favour of a plaintiff or defendant in any
action of the court or tribunal before whom such action is brought as
security for costs and expenses where the Owner is prosecuting or
defending such other than in good faith by appropriate steps;
and
|
|
|
(g)
|
Security
Interests arising by operation of law in respect of taxes which are not
overdue for payment other than taxes being contested in good faith by
appropriate steps and in respect of which appropriate reserves have been
made;
|
“Pertinent Jurisdiction”, in
relation to a company, means:
|
|
(a)
|
England
and Wales;
|
|
(b)
|
the
country under the laws of which the company is incorporated or
formed;
|
|
(c)
|
a
country in which the company's central management and control is or has
recently been exercised;
|
|
8
|
|
(d)
|
a
country in which the overall net income of the company is subject to
corporation tax, income tax or any similar
tax;
|
|
|
(e)
|
a
country in which assets of the company (other than securities issued by,
or loans to, related companies) having a substantial value are situated,
in which the company maintains a permanent place of business, or in which
a Security Interest created by the company must or should be registered in
order to ensure its validity or priority;
and
|
|
|
(f)
|
a
country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would
have such jurisdiction if their assistance were requested by the courts of
a country referred to in paragraphs (b) or (c)
above;
|
“Potential Event of Default”
means an event or circumstance which, with the giving of any notice, the lapse
of time, a determination of the Lender and/or the satisfaction of any other
condition, would constitute an Event of Default;
“Quotation Date” means, in
relation to any Interest Period (or any other period for which an interest rate
is to be determined under any provision of a Finance Document), the day on which
quotations would ordinarily be given by leading banks in the London Interbank
Market for deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that Interest Period or other
period;
“Relevant Person” has the
meaning given in Clause 18.7;
“Repayment Date” means a date
on which a repayment is required to be made under Clause 8;
“Requisition Compensation”
includes all compensation or other moneys payable by reason of any act or event
such as is referred to in paragraph (b) of the definition of “Total
Loss”;
“Secured Liabilities” means all
liabilities which the Borrower, the Security Parties or any of them have, at the
date of this Agreement or at any later time or times, under or in connection
with any Finance Document or any judgment relating to any Finance Document; and
for this purpose, there shall be disregarded any total or partial discharge of
these liabilities, or variation of their terms, which is effected by, or in
connection with, any bankruptcy, liquidation, arrangement or other procedure
under the insolvency laws of any country;
“Security Cover
Percentage” means, at any relevant time, the aggregate of the
amounts referred in paragraphs (a) and (b) of Clause 14.1 expressed as a
percentage of the Loan;
“Security Interest”
means:
|
|
(a)
|
a
mortgage, charge (whether fixed or floating) or pledge, any maritime or
other lien or any other security interest of any
kind;
|
|
|
(b)
|
the
security rights of a plaintiff under an action in rem; and
|
9
|
(c)
|
any
arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to
the position in which B would have been had he held a security interest
over an asset of A; but this paragraph (c) does not apply to a right of
set off or combination of accounts conferred by the standard terms of
business of a bank or financial
institution;
|
“Security Party” means the
Owner, the Approved Manager and any other person (except the Lender) who, as a
surety or mortgagor, as a party to any subordination or priorities arrangement,
or in any similar capacity, executes a document falling within the final
paragraph of the definition of “Finance Documents”;
“Security Period” means the
period commencing on the date of this Agreement and ending on the date on which
the Lender notifies the Borrower and the Security Parties that:
|
|
(a)
|
all
amounts which have become due for payment by the Borrower or any Security
Party under the Finance Documents have been
paid;
|
|
|
(b)
|
no
amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;
|
|
|
(c)
|
neither
the Borrower nor any Security Party has any future or contingent liability
under Clause 19, 20, or 21 or any other provision of this Agreement or
another Finance Document; and
|
|
|
(d)
|
the
Lender does not consider that there is a significant risk that any payment
or transaction under a Finance Document would be set aside, or would have
to be reversed or adjusted, in any present or possible future bankruptcy
of the Borrower or a Security Party or in any present or possible future
proceeding relating to a Finance Document or any asset covered (or
previously covered) by a Security Interest created by a Finance
Document;
|
“Seller” means Empress Holding
Limited, a corporation incorporated and existing under the laws of Xxxxxxxx
Islands and having its registered office at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Xxxxxxxx Xxxxxxx XX00000;
“Ship” means the
2005-built bulk carrier of 52,200 metric deadweight tons currently registered in
the ownership of the Seller under the Xxxxxxxx Islands flag with the name
“VICTORIA” to be acquired by the Owner pursuant to the MOA and registered in the
ownership of the Owner under the same flag with the name “STAR
COSMO”;
“Total Assets” means, as of any
Compliance Date, the aggregate value of all assets of the Group included in the
most recent Accounting Information as “current assets” and the value of all
investments (valued in accordance with GAAP) and all other tangible and
intangible assets of the Group properly included in the most recent Accounting
Information as “fixed assets” in accordance with GAAP;
“Total Liabilities” means, as
of any Compliance Date, the total liabilities of the Group as at that Compliance
Date as shown in the most recent Accounting Information delivered by the
Borrower pursuant to Clause 10.6;
“Total Loss”
means:
|
|
(a)
|
actual,
constructive, compromised, agreed or arranged total loss of the
Ship;
|
10
|
(b)
|
any
expropriation, confiscation, requisition or acquisition of the Ship,
whether for full consideration, a consideration less than her proper
value, a nominal consideration or without any consideration, which is
effected by any government or official authority or by any person or
persons claiming to be or to represent a government or official authority
(excluding a requisition for hire for a fixed period not exceeding 1 year
without any right to an extension);
and
|
|
|
(c)
|
any
condemnation of the Ship by any tribunal or by any person or persons
claiming to be a
tribunal; and
|
|
|
(d)
|
any
arrest, capture, seizure or detention of the Ship (including any hijacking
or theft) unless she is within 30 days redelivered to the full control of
the Owner;
|
“Total Loss Date”
means:
|
|
(a)
|
in
the case of an actual loss of the Ship, the date on which it occurred or,
if that is unknown, the date when the Ship was last heard
of;
|
|
|
(b)
|
in
the case of a constructive, compromised, agreed or arranged total loss of
the Ship, the earliest of:
|
|
|
(i)
|
the
date on which a notice of abandonment is given to the insurers;
and
|
|
|
(ii)
|
the
date of any compromise, arrangement or agreement made by or on behalf of
the Owner with the Ship's insurers in which the insurers agree to treat
the Ship as a total loss; and
|
|
|
(c)
|
in
the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Lender that the event constituting the
total loss occurred.
|
|
1.2
|
Construction of certain
terms. In this
Agreement:
|
“approved” means, for the
purposes of Clause 12, approved in writing by the Lender;
“asset” includes every kind of
property, asset, interest or right, including any present, future or contingent
right to any revenues or other payment;
“company” includes any
partnership, joint venture and unincorporated association;
“consent” includes an
authorisation, consent, approval, resolution, licence, exemption, filing,
registration, notarisation and legalisation;
“contingent liability” means a
liability which is not certain to arise and/or the amount of which remains
unascertained;
“document” includes a deed;
also a letter, fax or telex;
“excess risks” means the
proportion of claims for general average, salvage and salvage charges not
recoverable under the hull and machinery policies in respect of the Ship in
consequence of its insured value being less than the value at which the Ship is
assessed for the purpose of such claims;
“expense” means any kind of
cost, charge or expense (including all legal costs, charges and expenses) and
any applicable value added or other tax;
11
“law” includes any form of
delegated legislation, any order or decree, any treaty or international
convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its Security
Council;
“legal or administrative
action” means any legal proceeding or arbitration and any administrative
or regulatory action or investigation;
“liability” includes every kind
of debt or liability (present or future, certain or contingent), whether
incurred as principal or surety or otherwise;
“months” shall be construed in
accordance with Clause 1.3;
“obligatory insurances” means
all insurances effected, or which the Owner is obliged to effect, under Clause
12 or any other provision of this Agreement or another Finance
Document;
“parent company” has the
meaning given in Clause 1.4;
“person” includes any company;
any state, political sub-division of a state and local or municipal authority;
and any international organisation;
“policy”, in relation to any
insurance, includes a slip, cover note, certificate of entry or other document
evidencing the contract of insurance or its terms;
“protection and indemnity
risks” means the usual risks covered by a protection and indemnity
association managed in London, including pollution risks and the proportion (if
any) of any sums payable to any other person or persons in case of collision
which are not recoverable under the hull and machinery policies by reason of the
incorporation in them of clause 1 of the Institute Time Clauses (Hulls)(1/10/83)
or clause 8 of the Institute Time Clauses (Hulls)(1/11/1995) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;
“regulation” includes any
regulation, rule, official directive, request or guideline whether or not having
the force of law of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or
organisation;
“subsidiary” has the meaning
given in Clause 1.4;
“tax” includes any present or
future tax, duty, impost, levy or charge of any kind which is imposed by any
state, any political sub-division of a state or any local or municipal authority
(including any such imposed in connection with exchange controls), and any
connected penalty, interest or fine; and
“war risks” includes the risk
of mines and all risks excluded by clause 23 of the Institute Time Clauses
(Hulls)(1/10/83) or clause 24 of the Institute Time Clauses
(Hulls)(1/11/1995).
|
1.3
|
Meaning of
“month”. A period of one or more “months” ends on the day
in the relevant calendar month numerically corresponding to the day of the
calendar month on which the period started (“the numerically corresponding
day”), but:
|
|
(a)
|
on
the Business Day following the numerically corresponding day if the
numerically corresponding day is not a Business Day or, if there is no
later Business Day in the same calendar month, on the Business Day
preceding the numerically corresponding day;
or
|
12
|
(b)
|
on
the last Business Day in the relevant calendar month, if the period
started on the last Business Day in a calendar month or if the last
calendar month of the period has no numerically corresponding
day,
|
and
“month” and “monthly” shall be construed
accordingly.
|
1.4
|
Meaning of
“subsidiary”. A company (S) is a subsidiary of another
company (P) if:
|
|
(a)
|
a
majority of the issued shares in S (or a majority of the issued shares in
S which carry unlimited rights to capital and income distributions) are
directly owned by P or are indirectly attributable to P;
or
|
|
(b)
|
P
has direct or indirect control over a majority of the voting rights
attaching to the issued shares of S;
or
|
|
(c)
|
P
has the direct or indirect power to appoint or remove a majority of the
directors of S; or
|
|
(d)
|
P
otherwise has the direct or indirect power to ensure that the affairs of S
are conducted in accordance with the wishes of
P,
|
and
any company of which S is a subsidiary is a parent company of S.
|
1.5
|
General
Interpretation. In this
Agreement:
|
|
(a)
|
references
in Clause 1.1 to a Finance Document or any other document being in a
particular form include references to that form with any modifications to
that form which the Lender approves or reasonably
requires;
|
|
(b)
|
references
to, or to a provision of, a Finance Document or any other document are
references to it as amended or supplemented, whether before the date of
this Agreement or otherwise;
|
|
(c)
|
references
to, or to a provision of, any law include any amendment, extension,
re-enactment or replacement, whether made before the date of this
Agreement or otherwise;
|
|
(d)
|
words
denoting the singular number shall include the plural and vice versa;
and
|
|
(e)
|
Clauses
1.1 to 1.5 apply unless the contrary intention
appears.
|
|
1.6
|
Headings. In
interpreting a Finance Document or any provision of a Finance Document,
all clause, sub-clause and other headings in that and any other Finance
Document shall be entirely
disregarded.
|
|
2
|
FACILITY
|
|
2.1
|
Amount of
facility. Subject to the other provisions of this
Agreement, the Lender shall make available to the Borrower, in a single
advance, a loan facility of up to $35,000,000 (being approximately 55 per
cent. of the Contract Price).
|
|
2.2
|
Purpose of Loan. The
Borrower undertakes with the Lender to use the Loan only for the purpose
stated in the preamble to this Agreement and Clause
3.2.
|
13
|
3
|
DRAWDOWN
|
|
3.1
|
Request for
Loan. Subject to the following conditions, the Borrower
may request the Loan to be advanced by ensuring that the Lender receives
the completed Drawdown Notice not later than 11.00 a.m. (Piraeus time) 3
Business Days prior to the intended Drawdown
Date.
|
|
3.2
|
Availability. The
conditions referred to in Clause 3.1 are
that:
|
|
(a)
|
the
Drawdown Date has to be a Business Day during the Availability
Period;
|
|
(b)
|
the
Loan shall be on-lent by the Borrower to the Owner and shall be used for
the purpose of part-financing the Contract Price of the
Ship;
|
|
(c)
|
the
Loan shall be in an amount not exceeding $35,000,000 (being approximately
55 per cent. of the Contract Price of the Ship payable pursuant to the
MOA); and
|
|
(d)
|
the
Loan shall not exceed the
Commitment.
|
|
3.3
|
Drawdown Notice
irrevocable. The Drawdown Notice must be signed by an
authorised signatory or director of the Borrower; and once served, the
Drawdown Notice cannot be revoked without the prior consent of the
Lender.
|
|
3.4
|
Disbursement of
Loan. Subject to the provisions of this Agreement, the
Lender shall on the Drawdown Date advance the Loan to the Borrower; and
payment to the Borrower shall be made to the account of the Seller which
the Borrower specifies in the Drawdown
Notice.
|
|
3.5
|
Disbursement of Loan to third
party. The payment by the Lender under Clause 3.4
shall constitute the advance of the Loan and the Borrower shall at that
time become indebted, as principal and direct obligor, to the Lender in an
amount equal to the Loan.
|
|
4
|
INTEREST
|
|
4.1
|
Payment of normal
interest. Subject to the provisions of this Agreement,
interest on the Loan in respect of each Interest Period shall be paid by
the Borrower on the last day of that Interest
Period.
|
|
4.2
|
Normal rate of
interest. Subject to the terms of this Agreement, the
rate of interest applicable to the Loan (or any part thereof) for each
Interest Period relating thereto shall be the aggregate of (i) the Margin
and (ii) LIBOR for that Interest
Period.
|
|
4.3
|
Payment of accrued
interest. In the case of an Interest Period longer than
3 months, accrued interest shall be paid every 3 months during that
Interest Period and on the last day of that Interest
Period.
|
|
4.4
|
Notification of market
disruption. The Lender shall promptly notify the
Borrower if no rate is quoted on Reuters BBA Page LIBOR 01 or if for any
reason the Lender is unable to obtain Dollars in the London Interbank
Market in order to fund the Loan (or any part of it) during any Interest
Period, stating the circumstances which have caused such notice to be
given.
|
14
|
4.5
|
Suspension of
drawdown. If the Lender's notice under Clause 4.4
is served before the Loan is made, the Lender's obligation to make the
Loan shall be suspended while the circumstances referred to in the
Lender's notice continue.
|
|
4.6
|
Negotiation of alternative rate
of interest. If the Lender’s notice under
Clause 4.4 is served after the Loan is made, the Borrower and the
Lender shall use reasonable endeavours to agree, within the 30 days after
the date on which the Lender serves its notice under Clause 4.4 (the
“Negotiation
Period”), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the Loan
during the Interest Period
concerned.
|
|
4.7
|
Application of agreed
alternative rate of interest. Any alternative interest
rate or an alternative basis which is agreed during the Negotiation Period
shall take effect in accordance with the terms
agreed.
|
|
4.8
|
Alternative rate of interest in
absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the
relevant circumstances are continuing at the end of the Negotiation
Period, then the Lender shall set an interest period and interest rate
representing the cost of funding of the Lender in Dollars or in any
available currency of the Loan plus the Margin; and the procedure provided
for by this Clause 4.8 shall be repeated if the relevant
circumstances are continuing at the end of the interest period so set by
the Lender.
|
|
4.9
|
Notice of
prepayment. If the Borrower does not agree with an
interest rate set by the Lender under Clause 4.8, the Borrower may
give the Lender not less than 15 Business Days' notice of its intention to
prepay at the end of the interest period set by the
Lender.
|
|
4.10
|
Prepayment. A
notice under Clause 4.9 shall be irrevocable; and on the last
Business Day of the interest period set by the Lender, the Borrower shall
prepay (without premium or penalty) the Loan, together with accrued
interest thereon at the applicable rate plus the
Margin.
|
|
4.11
|
Application of
prepayment. The provisions of Clause 7 shall apply
in relation to the prepayment.
|
|
5
|
INTEREST
PERIODS
|
|
5.1
|
Commencement of Interest
Periods. The first Interest Period applicable to the
Loan shall commence on the Drawdown Date and each subsequent Interest
Period shall commence on the expiry of the preceding Interest
Period.
|
|
5.2
|
Duration of normal Interest
Periods. Subject to Clauses 6.3 and 6.4, each Interest
Period in respect of the Loan shall
be:
|
|
(a)
|
1,
3, 6 or 9 months as notified by the Borrower to the Lender not later than
11.00 a.m. (Piraeus time) 3 Business Days before the commencement of the
Interest Period;
|
|
(b)
|
3
months, if the Borrower fails to notify the Lender by the time specified
in paragraph (a) above; or
|
|
(c)
|
such
other period as the Lender may agree with the
Borrower.
|
|
5.3
|
Duration of Interest Periods
for repayment instalments. In respect of an amount due
to be repaid under Clause 7 on a particular Repayment Date, an Interest
Period shall end on that Repayment
Date.
|
15
|
5.4
|
Non-availability of matching
deposits for Interest Period selected. If, after the
Borrower has selected and the Lender has agreed an Interest Period longer
than 6 months, the Lender notifies the Borrower by 11.00 a.m. (Piraeus
time) on the second Business Day before the commencement of the Interest
Period that it is not satisfied that deposits in Dollars for a period
equal to the Interest Period will be available to it in the London
Interbank Market when the Interest Period commences, the Interest Period
shall be of 3 months.
|
|
6
|
DEFAULT
INTEREST
|
|
6.1
|
Payment of default interest on
overdue amounts. The Borrower shall pay interest in
accordance with the following provisions of this Clause 6 on any amount
payable by the Borrower under any Finance Document which the Lender does
not receive on or before the relevant date, that
is:
|
|
(a)
|
the
date on which the Finance Documents provide that such amount is due for
payment; or
|
|
(b)
|
if
a Finance Document provides that such amount is payable on demand, the
date on which the demand is served;
or
|
|
(c)
|
if
such amount has become immediately due and payable under Clause 18.4, the
date on which it became immediately due and
payable.
|
|
6.2
|
Default rate of
interest. Interest shall accrue on an overdue amount
from (and including) the relevant date until the date of actual payment
(as well after as before judgment) at the rate per annum determined by the
Lender to be 2 per cent. above:
|
|
(a)
|
in
the case of an overdue amount of principal, the higher of the rates set
out at Clauses 6.3(a) and (b); or
|
|
(b)
|
in
the case of any other overdue amount, the rate set out at Clause
6.3(b).
|
|
6.3
|
Calculation of default rate of
interest. The rates referred to in Clause 6.2
are:
|
|
(a)
|
the
rate applicable to the overdue principal amount immediately prior to the
relevant date (but only for any unexpired part of any then current
Interest Period applicable to it);
|
|
(b)
|
the
Margin plus, in respect of successive periods of any duration (including
at call) up to 3 months which the Lender may select from time to
time:
|
|
|
(i)
|
LIBOR;
or
|
|
|
(ii)
|
if
the Lender determines that Dollar deposits for any such period are not
being made available to it by leading banks in the London Interbank Market
in the ordinary course of business, a rate from time to time determined by
the Lender by reference to the cost of funds to it from such other sources
as the Lender may from time to time
determine.
|
|
6.4
|
Notification of interest
periods and default rates. The Lender shall promptly
notify the Borrower of each interest rate determined by it under Clause
6.3 and of each period selected by it for the purposes of paragraph (b) of
that Clause; but this shall not be taken to imply that the Borrower is
liable to pay such interest only with effect from the date of the Lender's
notification.
|
16
|
6.5
|
Payment of accrued default
interest. Subject to the other provisions of this
Agreement, any interest due under this Clause shall be paid on the last
day of the period by reference to which it was
determined.
|
|
6.6
|
Compounding of default
interest. Any such interest which is not paid at the end
of the period by reference to which it was determined shall thereupon be
compounded.
|
|
7
|
REPAYMENT
AND PREPAYMENT
|
|
7.1
|
Repayment
instalments. The Borrower shall repay the Loan by (a) 24
consecutive three-monthly instalments of (i) in the case of the first to
fourth instalments (inclusive), in the amount of $1,500,000 each, (ii) in
the case of the fifth to eighth instalments (inclusive), in the amount of
$1,250,000 each, (iii) in the case of the ninth to twelfth instalments
(inclusive), in the amount of $875,000 each and (iv) in the case of the
thirteenth to twenty forth instalments (inclusive), in the amount of
$500,000 each and (b) a balloon payment in the amount of $14,500,000 (the
“Balloon
Instalment”) Provided that if the
Loan is drawdown in less than the maximum available amount thereof, each
repayment instalment (including the Balloon Instalment) shall be reduced
pro rata by an amount in aggregate equal to such undrawn
amount.
|
|
7.2
|
Repayment
Dates. The first repayment instalment for the Loan shall
be repaid on the date falling 3 months after the Drawdown Date, each
subsequent repayment instalment shall be repaid at 3-monthly intervals
thereafter and the last instalment shall be repaid, together with the
Balloon Instalment, on the date falling on the sixth anniversary of the
Drawdown Date.
|
|
7.3
|
Final Repayment
Date. On the final Repayment Date, the Borrower shall
additionally pay to the Lender all other sums then accrued or owing under
any Finance Document.
|
|
7.4
|
Voluntary
prepayment. Subject to the following conditions, the
Borrower may prepay the whole or any part of the Loan on the last day of
an Interest Period.
|
|
7.5
|
Conditions for voluntary
prepayment. The conditions referred to in Clause 7.4 are
that:
|
|
(a)
|
a
partial prepayment shall be in an amount of $500,000 or a higher integral
multiple thereof;
|
|
(b)
|
the
Lender has received from the Borrower at least 30 days’ prior written
notice specifying the amount to be prepaid and the date on which the
prepayment is to be made; and
|
|
(c)
|
the
Borrower has provided evidence satisfactory to the Lender that any consent
required by the Borrower or any Security Party in connection with the
prepayment has been obtained and remains in force, and that any regulation
relevant to this Agreement which affects the Borrower or any Security
Party has been complied with.
|
|
7.6
|
Effect of notice of
prepayment. A prepayment notice may not be withdrawn or
amended without the consent of the Lender and the amount specified in the
prepayment notice shall become due and payable by the Borrower on the date
for prepayment specified in the prepayment
notice.
|
17
|
7.7
|
Mandatory
prepayment. The Borrower shall be obliged to prepay the
whole of the Loan:
|
|
(a)
|
if
the Ship is sold, on or before the date on which the sale is completed by
delivery of the Ship to the buyer;
or
|
|
(b)
|
if
the Ship becomes a Total Loss, on the earlier of the date falling 180 days
after the relevant Total Loss Date and the date of receipt by the Lender
of the proceeds of insurance relating to such Total
Loss.
|
|
7.8
|
Amounts payable on
prepayment. A prepayment shall be made together with
accrued interest (and any other amount payable under Clause 20 or
otherwise) in respect of the amount prepaid and, if the prepayment is not
made on the last day of an Interest Period together with any sums payable
under Clause 20.1(b) but without premium or
penalty.
|
|
7.9
|
Application of partial
prepayment. Each partial prepayment shall be applied in
inverse order of maturity against the repayment instalments (including the
Balloon Instalment) which are outstanding at the relevant
time.
|
|
7.10
|
No
reborrowing. No amount prepaid may be
reborrowed.
|
|
8
|
CONDITIONS
PRECEDENT
|
|
8.1
|
Documents, fees and no
default. The Lender's obligation to advance the Loan is
subject to the following conditions
precedent:
|
|
(a)
|
that,
on or before the service of the Drawdown Notice, the Lender receives the
documents described in Part A of Schedule 2 in form and substance
satisfactory to it and its lawyers;
|
|
(b)
|
that,
on the Drawdown Date but prior to the advance of the Loan, the Lender
receives the documents described in Part B of Schedule 2 in form and
substance satisfactory to it and its
lawyers;
|
|
(c)
|
that
before the service of the Drawdown Notice the Lender receives the
arrangement fee referred to in Clause 19.1 and has received payment of the
expenses referred to in Clause
19.2;
|
|
(d)
|
that
both at the date of the Drawdown Notice and at the Drawdown
Date:
|
|
|
(i)
|
no
Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the
Loan;
|
|
|
(ii)
|
the
representations and warranties in Clause 9.1 and those of the Borrower or
any Security Party which are set out in the other Finance Documents would
be true and not misleading if repeated on each of those dates with
reference to the circumstances then
existing;
|
|
|
(iii)
|
none
of the circumstances contemplated by Clause 4.4 has occurred and is
continuing; and
|
|
|
(iv)
|
there
has been no material adverse change in the financial position, state of
affairs or prospects of the Borrower, any Security Party or any member of
the Group since the date of the Lender’s commitment letter
(dated )
to the Borrower for the Loan, in the light of which the Lender considers
that there is a significant risk that the Borrower or any other Security
Party will later become unable to discharge its liabilities under the
Finance Documents to which it is a party as they fall
due;
|
18
|
(e)
|
that,
if the ratio set out in Clause 14.1 were applied immediately following the
advance of the Loan, the Borrower would not be obliged to provide
additional security or prepay part of the Loan under that Clause;
and
|
|
(f)
|
that
the Lender has received, and found to be acceptable to it, any further
opinions, consents, agreements and documents in connection with the
Finance Documents which the Lender may request by notice to the Borrower
prior to the Drawdown Date.
|
|
8.2
|
Waiver of conditions
precedent. If the Lender, at its discretion, permits the
Loan to be borrowed before certain of the conditions referred to in Clause
8.1 are satisfied, the Borrower shall ensure that those conditions are
satisfied within 5 Business Days after the Drawdown Date (or such longer
period as the Lender may specify).
|
|
9
|
REPRESENTATIONS
AND WARRANTIES
|
|
9.1
|
General. The
Borrower represents and warrants to the Lender as
follows.
|
|
9.2
|
Status. The
Borrower is duly incorporated and validly existing and in good standing
under the laws of the Xxxxxxxx
Islands.
|
|
9.3
|
Share capital and
ownership. The Borrower has an authorised share capital
divided into 54,530,989 common shares and 5,934,080 warrants each of $0.01
par value, issued in registered
form.
|
|
9.4
|
Corporate
power. The Borrower has the corporate capacity, and has
taken all corporate action and obtained all consents necessary for
it:
|
|
(a)
|
to
execute the Finance Documents to which it is a party;
and
|
|
(b)
|
to
borrow under this Agreement and to make all the payments contemplated by,
and to comply with, those Finance Documents to which it is a
party.
|
|
9.5
|
Consents in
force. All the consents referred to in Clause 9.4 remain
in force and nothing has occurred which makes any of them liable to
revocation.
|
|
9.6
|
Legal validity; effective
Security Interests. The Finance Documents to which the
Borrower is a party, do now or, as the case may be, will, upon execution
and delivery (and, where applicable, registration as provided for in the
Finance Documents):
|
|
(a)
|
constitute
the Borrower's legal, valid and binding obligations enforceable against
the Borrower in accordance with their respective terms;
and
|
|
(b)
|
create
legal, valid and binding Security Interests enforceable in accordance with
their respective terms over all the assets to which they, by their terms,
relate,
|
subject
to any relevant insolvency laws affecting creditors' rights
generally.
|
9.7
|
No third party Security
Interests. Without limiting the generality of Clause
9.6, at the time of the execution and delivery of each Finance
Document:
|
|
(a)
|
the
Borrower will have the right to create all the Security Interests which
that Finance Document purports to create;
and
|
19
|
(b)
|
no
third party will have any Security Interest (except for Permitted Security
Interests) or any other interest, right or claim over, in or in relation
to any asset to which any such Security Interest, by its terms,
relates.
|
|
9.8
|
No
conflicts. The execution by the Borrower of each Finance
Document to which it is a party, and the borrowing by the Borrower of the
Loan, and its compliance with each Finance Document to which it is a party
will not involve or lead to a contravention
of:
|
|
(a)
|
any
law or regulation; or
|
|
(b)
|
the
constitutional documents of the Borrower;
or
|
|
(c)
|
any
contractual or other obligation or restriction which is binding on the
Borrower or any of its assets including, without limitation, its
shareholding in the Owner.
|
|
9.9
|
No withholding
taxes. All payments which the Borrower is liable to make
under the Finance Documents to which it is a party may be made without
deduction or withholding for or on account of any tax payable under any
law of any Pertinent Jurisdiction.
|
|
9.10
|
No
default. No Event of Default or Potential Event of
Default has occurred and is
continuing.
|
|
9.11
|
Information. All
information which has been provided in writing by or on behalf of the
Borrower or any Security Party to the Lender in connection with any
Finance Document satisfied the requirements of Clause 10.5; all audited
and unaudited accounts which have been so provided satisfied the
requirements of Clause 10.7; and there has been no material adverse change
in the financial position or state of affairs of the Borrower, the Owner
or any other member of the Group from that disclosed in the latest of
those accounts.
|
|
9.12
|
No
litigation. No legal or administrative action involving
the Borrower, the Owner or any other member of the Group (including,
without limitation, any action relating to any alleged or actual breach of
the ISM Code and the ISPS code and/or any action relating to the MOA and
the Initial Charterparty) has been commenced or taken or, to the
Borrower’s knowledge, is likely to be commenced or
taken.
|
|
9.13
|
Validity and completeness of
MOA and Initial Charterparty. The MOA and the Initial Charterparty
each constitute valid, binding and enforceable obligations of the parties
thereto in accordance with their terms;
and:
|
|
(a)
|
the
copies of each of the MOA and the Initial Charterparty delivered to the
Lender before the date of this Agreement is a true and complete copy
thereof; and
|
|
(b)
|
no
amendments or additions to the MOA or the Initial Charterparty have been
agreed nor has any party thereto waived any of their respective rights
under the MOA or the Initial
Charterparty.
|
|
9.14
|
No rebates
etc. There is no agreement or understanding to allow or
pay any rebate, premium, commission, discount or other benefit or payment
(howsoever described) to the Owner, the Seller or a third party in
connection with the purchase by the Owner of the Ship other than as
disclosed to the Lender in writing on or prior to the date of this
Agreement (including, without limitation, any information disclosed in the
Form F-1 registration statement and prospectus filed with the US
Securities and Exchange Commission, a copy of which has been delivered to
the Lender).
|
20
|
9.15
|
Compliance with certain
undertakings. At the date of this Agreement, the
Borrower is in compliance with Clauses 10.2, 10.4, 10.9 and
10.12.
|
|
9.16
|
Taxes
paid. The Borrower has paid all taxes applicable to, or
imposed on or in relation to the Borrower or its
business.
|
|
9.17
|
ISM Code and ISPS Code
compliance. The Borrower will procure that the Owner and
the Approved Manager obtain all necessary ISM Code Documentation and ISPS
Code Documentation in connection with the Ship and comply with the ISM
Code and the ISPS Code.
|
|
9.18
|
No money
laundering. Without prejudice to the generality of
Clause 2.2, in relation to the borrowing by the Borrower of the Loan, the
performance and discharge of its obligations and liabilities under the
Finance Documents, and the transactions and other arrangements effected or
contemplated by the Finance Documents to which the Borrower is a party,
the Borrower confirms that it is acting for its own account and that the
foregoing will not involve or lead to contravention of any law, official
requirement or other regulatory measure or procedure implemented to combat
“money laundering” (as defined in Article 1 of the Directive (91/308/EEC)
of the Council of the European
Communities).
|
|
10
|
GENERAL
UNDERTAKINGS
|
|
10.1
|
General. The Borrower
undertakes with the Lender to comply with the following provisions of this
Clause 10 at all times during the Security Period, except as the Lender
may otherwise permit.
|
|
10.2
|
Title; negative pledge and pari
passu ranking. The Borrower
will:
|
|
(a)
|
own
(directly or indirectly) the entire beneficial interest in the Owner free
from all Security Interests and other interests and rights of every kind,
except for those created by the Finance
Documents;
|
|
(b)
|
not
create or permit to arise any Security Interest (except for Permitted
Security Interests) over any other asset, present or future;
and
|
|
(c)
|
procure
that its liabilities under the Finance Documents to which it is a party do
and will rank at least pari passu with all its other present and future
unsecured liabilities, except for liabilities which are mandatorily
preferred by law.
|
|
10.3
|
No disposal of
assets. The Borrower will not transfer, lease or
otherwise dispose of:
|
|
(a)
|
all
or a substantial part of its assets, whether by one transaction or a
number of transactions, whether related or not;
or
|
|
(b)
|
any
debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or
compensation.
|
21
|
10.4
|
Restriction on other
liabilities or obligations to be incurred. The Borrower
will not incur, and will procure that the Owner will not incur, any
liability or obligation except liabilities and
obligations:
|
|
(a)
|
under
the Finance Documents to which each is a
party;
|
|
(b)
|
(in
the case of the Owner), under the MOA and the Initial Charterparty and
incurred in the normal course of its business of owning, operating and
chartering the Ship; and
|
|
(c)
|
(in
the case of the Borrower) incurred in the normal course of its business
(which shall include, without limitation, incurring Financial Indebtedness
for the financing of the vessels owned by its subsidiaries guaranteeing
the obligations of its subsidiaries and all other matters reasonably
incidental thereto).
|
|
10.5
|
Information provided to be
accurate. All financial and other information which is
provided in writing by or on behalf of the Borrower under or in connection
with any Finance Document will be true and not misleading and will not
omit any material fact or
consideration.
|
|
10.6
|
Provision of financial
statements. The Borrower will send to the
Lender:
|
|
(a)
|
as
soon as possible, but in no event later than 180 days after the end of
each financial year of the Borrower (commencing with the financial year
ended 31 December 2007), the audited consolidated accounts of the Group
for that financial year;
|
|
(b)
|
as
soon as possible, but in no event later than 60 days after the end of each
quarterly period in each financial year of the Borrower (commencing with
the financial quarter ended on 30 June 2008), the combined unaudited
accounts of the Group for that 3- month period certified in each case as
to their correctness by the chief financial officer of the Borrower;
and
|
|
(c)
|
promptly
after each request by the Lender, such further financial information about
the Borrower, the Owner, the Group and/or the Ship including, but not
limited to, charter arrangements, Financial Indebtedness, operating
expenses and loan repayment profiles, as the Lender may
require.
|
|
10.7
|
Form of financial
statements. All accounts (audited and unaudited)
delivered under Clause 10.6 will:
|
|
(a)
|
be
prepared in accordance with all applicable laws and
GAAP;
|
|
(b)
|
give
a true and fair view of the state of affairs of the Group at the date of
those accounts and of its profit for the period to which those accounts
relate; and
|
|
(c)
|
fully
disclose or provide for all significant liabilities of the Group;
and
|
|
(d)
|
be
accompanied by a certificate signed by a certificate signed by the chief
financial officer of the Borrower confirming that, as at the date of the
certificate, no Event of Default has occurred and is
continuing.
|
|
10.8
|
Shareholder and creditor
notices. The Borrower will send the Lender, at the same
time as they are despatched, copies of all communications which are
despatched to all of the Borrower's shareholders or creditors or any class
of them.
|
|
10.9
|
Consents. The
Borrower will maintain in force and promptly obtain or renew, and will
promptly send certified copies to the Lender of, all consents
required:
|
|
(a)
|
for
the Borrower and the Owner to perform their respective obligations under
any Finance Document to which each is a
party;
|
22
|
(b)
|
for
the validity or enforceability of any Finance
Document;
|
|
(c)
|
for
the Owner to continue to own and operate the
Ship,
|
and
the Borrower will comply (or procure compliance) with the terms of all such
consents.
|
10.10
|
Maintenance of Security
Interests. The Borrower
will:
|
|
(a)
|
at
its own cost, do all that it reasonably can to ensure that any Finance
Document validly creates the obligations and the Security Interests which
it purports to create; and
|
|
(b)
|
without
limiting the generality of paragraph (a), at its own cost, promptly
register, file, record or enrol any Finance Document with any court or
authority in all Pertinent Jurisdictions, pay any stamp, registration or
similar tax in all Pertinent Jurisdictions in respect of any Finance
Document, give any notice or take any other step which is or has become
necessary or desirable for any Finance Document to be valid, enforceable
or admissible in evidence or to ensure or protect the priority of any
Security Interest which it creates.
|
|
10.11
|
Notification of
litigation. The Borrower will provide the Lender with
details of any legal or administrative action involving the Borrower, the
Owner, any other Security Party, the Approved Manager, the Ship or the
Earnings or the Insurances of the Ship as soon as such action is
instituted or it becomes apparent to the Borrower that it is likely to be
instituted, unless it is clear that the legal or administrative action
cannot be considered material in the context of the Finance
Documents.
|
|
10.12
|
Principal place of
business. The Borrower will maintain its place of
business, and keep its corporate documents and records, at the address
stated at Clause 28.2(a); and the Borrower will not establish, or do
anything as a result of which it would be deemed to have a place of
business in the United Kingdom or the United States of
America.
|
|
10.13
|
Confirmation of no
default. The Borrower will, within 2 Business Days after
service by the Lender of a written request, serve on the Lender a notice
which is signed by an officer or director of the Borrower and which (based
on its most recent annual or interim financial
statements):
|
|
(a)
|
states
that no Event of Default or Potential Event of Default has occurred;
or
|
|
(b)
|
states
that no Event of Default or Potential Event of Default has occurred,
except for a specified event or matter, of which all material details are
given.
|
|
10.14
|
Notification of
default. The Borrower will notify the Lender as soon as
the Borrower becomes aware of:
|
|
(a)
|
the
occurrence of an Event of Default or a Potential Event of Default;
or
|
|
(b)
|
any
matter which indicates that an Event of Default or a Potential Event of
Default may have occurred,
|
and
will thereafter keep the Lender fully up-to-date with all
developments.
23
|
10.15
|
Provision of further
information. The Borrower will, as soon as practicable
after receiving the request, provide the Lender with any additional
financial or other information
relating:
|
|
(a)
|
to
the Borrower, the Owner, any other member of the Group, the Ship, the
Approved Manager or any other Security Party, the Insurances or the
Earnings; or
|
|
(b)
|
to
any other matter relevant to, or to any provision of, a Finance
Document,
|
which
may be requested by the Lender at any time.
|
10.16
|
No amendment to MOA or Initial
Charterparty. The Borrower will procure that the Owner
will not agree to any amendment or supplement to (in the case of the
Owner) the MOA or the Initial
Charterparty.
|
|
10.17
|
Ownership. The
Borrower shall ensure that (a) it shall remain the direct or indirect
owner of all of the limited liability company interests in the Owner and
(b) there shall be no change in the legal and beneficial ownership of the
shares in the Owner.
|
|
10.18
|
General and administrative
costs. The Borrower shall ensure that the payment of all
the general and administrative costs of the Borrower and the Owner in
connection with the ownership and operation of the Ship (including,
without limitation, the payment of the management fee pursuant to the
Management Agreement) shall be fully subordinated to the payment
obligations of the Borrower and the Owner under this Agreement and the
other Finance Documents throughout the Security
Period.
|
|
10.19
|
Money
laundering. Promptly upon the Lender’s request the
Borrower will supply, or procure the supply of, such documentation and
other evidence as is reasonably requested by the Lender in order to carry
out and be satisfied with the results of all necessary “know your client”
or other checks which it is required to carry out in relation to the
transactions contemplated by the Finance Documents and to the identity of
any parties to the Finance Documents and their directors and
officers.
|
|
11
|
CORPORATE
UNDERTAKINGS
|
|
11.1
|
General. The
Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 11 at all times during the Security Period
except as the Lender may otherwise
permit.
|
|
11.2
|
Maintenance of
status. The Borrower will maintain its separate
corporate existence and remain in good standing under the laws of the
Republic of the Xxxxxxxx Islands.
|
|
11.3
|
Negative
undertakings. The Borrower will
not:
|
|
(a)
|
change
the nature of its business; or
|
|
(b)
|
provide
any form of credit or financial assistance
to:
|
|
|
(i)
|
a
person who is directly or indirectly interested in the Borrower's share or
loan capital; or
|
|
|
(ii)
|
any
company in or with which such a person is directly or indirectly
interested or connected;
|
|
|
or
enter into any transaction with or involving such a person or company on
terms which are, in any respect, less favourable to the Borrower than
those which it could obtain in a bargain made at arms'
length Provided that this shall
not prevent or restrict the Borrower from on-lending the Loan to the
Owner;
|
24
|
(c)
|
allow
the Owner to open or maintain any account with any bank or financial
institution except accounts with the Lender for the purpose of the Finance
Documents;
|
|
(d)
|
issue,
allot or grant any person a right to any shares in its capital or
repurchase (other than through the share repurchase schemes disclosed by
the Borrower to the Lender on or prior to the date of this Agreement) or
reduce its issued share capital; or
|
|
(e)
|
enter
into any form of amalgamation, merger or de-merger or any form of
reconstruction or reorganisation.
|
|
11.4
|
Subordination of rights of
Borrower. All rights which the Borrower at any time has
(whether in respect of the Loan or any other transaction) against any
Owner or its assets shall be fully subordinated to the rights of the
Lender under the Finance Documents; and in particular, the Borrower shall
not during the Security Period:
|
|
(a)
|
claim,
or in a bankruptcy of the Owner or prove for any amount payable to the
Borrower by the Owner, whether in respect of the Loan or any other
transaction;
|
|
(b)
|
take
or enforce any Security Interest for any such amount;
or
|
|
(c)
|
claim
to set-off any such amount against any amount payable by the Borrower to
the Owner.
|
|
11.5
|
Financial
Covenants. The Borrower undertakes that at all
times:
|
|
(a)
|
the
Interest Coverage Ratio shall not be less than
2:1;
|
|
(b)
|
the
Leverage Ratio shall not be greater than 0.6:1;
and
|
|
(c)
|
the
Borrower will maintain Liquid Funds in an aggregate amount of at least
$500,000 per Fleet Vessel.
|
|
11.6
|
Compliance
Check. Compliance with the undertakings contained in
Clause 11.5 shall be determined as at each Compliance Date by reference
to, in the case of the compliance check as at each of 31 March, 30 June
and 30 September in each financial year, the unaudited consolidated
accounts of the Group for the financial quarters ending on such date in
each financial year delivered by the Lender pursuant to this Agreement and
for the compliance check as at 31 December in each financial year, the
audited consolidated accounts for that financial year of the
Group delivered to the Lender pursuant to this Agreement. At
the same time as it delivers those consolidated accounts, the Borrower
shall deliver to the Lender a Compliance Certificate signed by the chief
financial officer of the Borrower.
|
|
11.7
|
Dividends. The
Borrower may pay dividends or make any other form of distribution subject
to the satisfaction of the following
conditions:
|
|
(a)
|
the
Lender has received a certificate issued by the chief financial officer of
the Borrower on the date on which the payment of the dividend is declared
which confirms that no Event of Default has occurred which is continuing
and that no Event of Default or Potential Event of Default will result
from the payment of the dividend or the making of the distribution;
and
|
|
(b)
|
the
Lender is satisfied that on the date on which the certificate referred to
in paragraph (a) is issued, the Security Cover Percentage is equal to at
least 125 per cent.
|
25
|
12
|
INSURANCE
|
|
12.1
|
General. The
Borrower also undertakes with the Lender to procure that the Owner will
comply with the following provisions of this Clause 12 at all times during
the Security Period (after the Ship has been delivered to the Owner in
accordance with the MOA) except as the Lender may otherwise
permit.
|
|
12.2
|
Maintenance of obligatory
insurances. The Borrower shall procure that the Owner
shall keep the Ship insured at the expense of the Owner
against:
|
|
(a)
|
fire
and usual marine risks (including hull and machinery and excess
risks);
|
|
(b)
|
war
risks (including protection and indemnity war
risks);
|
|
(c)
|
in
the case of protection and indemnity war risks, in an amount equal to the
amount for which the war risks under the hull policies are effected
(including, without limitation, protection and indemnity war risks in
excess of the amount of war risks
(hull));
|
|
(d)
|
protection
and indemnity risks in excess of the limit of cover for oil pollution
liability risks included within the protection and indemnity risks;
and
|
|
(e)
|
any
other risks against which the Lender considers, having regard to practices
and other circumstances prevailing at the relevant time, it would in the
opinion of the Lender be reasonable for the Owner to insure and which are
specified by the Lender by notice to the
Owner.
|
|
12.3
|
Terms of obligatory
insurances. The Borrower shall procure that the Owner
shall effect such insurances:
|
|
(a)
|
in
Dollars;
|
|
(b)
|
in
the case of fire and usual marine risks and war risks, in an amount on an
agreed value basis at least the greater of (i) an amount equal to 125 per
cent. of the Loan and (ii) the Market Value of the Ship;
and
|
|
(c)
|
in
the case of oil pollution liability risks, for an aggregate amount equal
to the highest level of cover from time to time available under basic
protection and indemnity club entry (with the international group of
protection and indemnity clubs) and the international marine insurance
market (currently $1,000,000,000);
|
|
(d)
|
in
relation to protection and indemnity risks, in respect of the full value
and tonnage of the Ship;
|
|
(e)
|
on
approved terms; and
|
|
(f)
|
through
approved brokers and with approved insurance companies and/or underwriters
or, in the case of war risks and protection and indemnity risks, in
approved war risks and protection and indemnity risks
associations.
|
|
12.4
|
Further protections for the
Lender. In addition to the terms set out in Clause 12.3,
the Borrower shall procure that the obligatory insurances
shall:
|
|
(a)
|
name
the Lender as sole loss payee with such directions for payment as the
Lender may specify;
|
26
|
(b)
|
provide
that all payments by or on behalf of the insurers under the obligatory
insurances to the Lender shall be made without set-off, counterclaim or
deductions or condition whatsoever;
|
|
(c)
|
provide
that the insurers shall waive, to the fullest extent permitted by English
law, their entitlement (if any) (whether by statute, common law, equity,
or otherwise) to be subrogated to the rights and remedies of the Lender in
respect of any rights or interests (secured or not) held by or available
to the Lender in respect of the Secured Liabilities, until the Secured
Liabilities shall have been fully repaid and discharged, except that the
insurers shall not be restricted by the terms of this paragraph (d) from
making personal claims against persons (other than the Owner or the
Lender) in circumstances where the insurers have fully discharged their
liabilities and obligations under the relevant obligatory
insurances;
|
|
(d)
|
provide
that such obligatory insurances shall be primary without right of
contribution from other insurances which may be carried by the
Lender;
|
|
(e)
|
provide
that the Lender may make proof of loss if the Owner fails to do so;
and
|
|
(f)
|
provide
that if any obligatory insurance is cancelled, or if any substantial
change is made in the coverage which adversely affects the interest of the
Lender, or if any obligatory insurance is allowed to lapse for non-payment
of premium, such cancellation, charge or lapse shall not be effective with
respect to the Lender for 30 days (or 7 days in the case of war risks)
after receipt by the Lender of prior written notice from the insurers of
such cancellation, change or lapse.
|
|
12.5
|
Renewal of obligatory
insurances. The Borrower shall procure that the Owner
shall:
|
|
(a)
|
at
least 21 days before the expiry of any obligatory
insurance:
|
|
|
(i)
|
notify
the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom the Owner proposes
to renew that insurance and of the proposed terms of renewal;
and
|
|
|
(ii)
|
in
case of any substantial change in insurance cover, obtain the Lender’s
approval to the matters referred to in paragraph (i)
above;
|
|
(b)
|
at
least 14 days before the expiry of any obligatory insurance, renew the
insurance in accordance with the Lender’s approval pursuant to paragraph
(a); and
|
|
(c)
|
procure
that the approved brokers and/or the war risks and protection and
indemnity associations with which such a renewal is effected shall
promptly after the renewal notify the Lender in writing of the terms and
conditions of the renewal.
|
|
12.6
|
Copies of policies; letters of
undertaking. The Borrower shall procure that the Owner
shall ensure that all approved brokers provide the Lender with copies of
all policies relating to the obligatory insurances which they effect or
renew and of a letter or letters of undertaking in a form required by the
Lender and including undertakings by the approved brokers
that:
|
|
(a)
|
they
will have endorsed on each policy, immediately upon issue, a loss payable
clause and a notice of assignment complying with the provisions of Clause
12.4;
|
27
|
(b)
|
they
will hold such policies, and the benefit of such insurances, to the order
of the Lender in accordance with the said loss payable
clause;
|
|
(c)
|
they
will advise the Lender immediately of any material change to the terms of
the obligatory insurances;
|
|
(d)
|
they
will notify the Lender, not less than 14 days before the expiry of the
obligatory insurances, in the event of their not having received notice of
renewal instructions from the Owner or its agents and, in the event of
their receiving instructions to renew, they will promptly notify the
Lender of the terms of the
instructions;
|
|
(e)
|
they
will notify the Lender if any person other than the Owner is named as
assured or co-assured in any of the obligatory insurances and shall
procure that, upon the written request of the Lender, such additional
assured or co-assured executes in favour of the Lender an assignment (in
such form as the Lenders may approve or require) of its interest in the
obligatory insurances; and
|
|
(f)
|
they
will not set off against any sum recoverable in respect of a claim
relating to the Ship owned by the Owner under such obligatory insurances
any premiums or other amounts due to them or any other person whether in
respect of the Ship or otherwise, they waive any lien on the policies or,
any sums received under them, which they might have in respect of such
premiums or other amounts, and they will not cancel such obligatory
insurances by reason of non-payment of such premiums or other amounts, and
will arrange for a separate policy to be issued in respect of the Ship
forthwith upon being so requested by the
Lender.
|
|
12.7
|
Copies of certificates of
entry. The Borrower shall procure that the Owner shall
ensure that any protection and indemnity and/or war risks associations in
which the Ship is entered provides the Lender
with:
|
|
(a)
|
a
certified copy of the certificate of entry for the
Ship;
|
|
(b)
|
a
letter or letters of undertaking in such form as may be required by the
Lender; and
|
|
(c)
|
where
required to be issued under the terms of insurance/indemnity provided by
the Owner’s protection and indemnity association, a certified copy of each
United States of America voyage quarterly declaration (or other similar
document or documents) made by the Owner in accordance with the
requirements of such protection and indemnity association;
and
|
|
(d)
|
a
certified copy of each certificate of financial responsibility for
pollution by oil or other Environmentally Sensitive Material issued by the
relevant certifying authority in relation to the Ship if
applicable.
|
|
12.8
|
Deposit of original
policies. The Borrower shall procure that the Owner
shall ensure that all policies relating to obligatory insurances are
deposited with the approved brokers through which the insurances are
effected or renewed.
|
|
12.9
|
Payment of
premiums. The Borrower shall procure that the Owner
shall punctually pay all premiums or other sums payable in respect of the
obligatory insurances and produce all relevant receipts when so required
by the Lender.
|
28
|
12.10
|
Guarantees. The
Borrower shall procure that the Owner shall ensure that any guarantees
required by a protection and indemnity or war risks association are
promptly issued and remain in full force and
effect.
|
|
12.11
|
Restrictions on
employment. The Borrower shall procure that the Owner
will not employ the Ship, nor permit her to be employed, outside the cover
provided by any obligatory
insurances.
|
|
12.12
|
Compliance with terms of
insurances. The Borrower shall procure that the Owner
shall not do or omit to do (or permit to be done or not to be done) any
act or thing which would or might render any obligatory insurance invalid,
void, voidable or unenforceable or render any sum payable thereunder
repayable in whole or in part; and, in
particular:
|
|
(a)
|
the
Owner shall take all necessary action and comply with all requirements
which may from time to time be applicable to the obligatory insurances,
and (without limiting the obligation contained in Clause 12.7(c) above)
ensure that the obligatory insurances are not made subject to any
exclusions or qualifications to which the Lender has not given its prior
approval;
|
|
(b)
|
the
Owner shall not make any changes relating to the classification or
classification society or manager or operator of the Ship unless approved
by the underwriters of the obligatory
insurances;
|
|
(c)
|
the
Owner shall not make all quarterly or other voyage declarations which may
be required by the protection and indemnity risks association in which the
Ship is entered to maintain cover for trading to the United States of
America and Exclusive Economic Zone (as defined in the United States Oil
Pollution Act 1990 or any other applicable legislation);
and
|
|
(d)
|
the
Owner shall not employ the Ship owned by it, nor allow it to be employed,
otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers
and complying with any requirements (as to extra premium or otherwise)
which the insurers specify.
|
|
12.13
|
Alteration to terms of
insurances. The Borrower shall procure that the Owner
shall neither make nor agree to any alteration to the terms of any
obligatory insurance or waive any right relating to any obligatory
insurance without the prior written consent of the
Lender.
|
|
12.14
|
Settlement of
claims. The Borrower shall procure that the Owner shall
not settle, compromise or abandon any claim under any obligatory insurance
for Total Loss or for a Major Casualty, and shall do all things necessary
and provide all documents, evidence and information to enable the Lender
to collect or recover any moneys which at any time become payable in
respect of the obligatory
insurances.
|
|
12.15
|
Provision of copies of
communications. The Borrower shall procure that the
Owner shall provide the Lender, at the time of each such communication,
copies of all written communications between the Owner
and:
|
|
(a)
|
the
approved brokers; and
|
|
(b)
|
the
approved protection and indemnity and/or war risks associations;
and
|
29
|
(c)
|
the
approved insurance companies and/or underwriters, which relate directly or
indirectly to:
|
|
|
(i)
|
the
Owner’s obligations relating to the obligatory insurances including,
without limitation, all requisite declarations and payments of additional
premiums or calls; and
|
|
|
(ii)
|
any
credit arrangements made between the Owner and any of the persons referred
to in paragraphs (a) or (b) above relating wholly or partly to the
effecting or maintenance of the obligatory
insurances.
|
|
12.16
|
Provision of
information. In addition, the Borrower shall procure
that the Owner shall promptly provide the Lender (or any persons which it
may designate) with any information which the Lender (or any such
designated person) reasonably requests for the purpose
of:
|
|
(a)
|
obtaining
or preparing any report from an independent marine insurance broker as to
the adequacy of the obligatory insurances effected or proposed to be
effected; and/or
|
|
(b)
|
effecting,
maintaining or renewing any such insurances as are referred to in Clause
12.17 below or dealing with or considering any matters relating to any
such insurances
|
|
|
and
the Borrower shall, within a reasonable time following the Lender’s
demand, indemnify the Lender in respect of all fees and other expenses
incurred by or for the account of the Lender in connection with any such
report as is referred to in paragraph (a)
above.
|
|
12.17
|
Mortgagee's interest
insurances. The Lender shall be entitled from time to
time to effect, maintain and renew a mortgage’s interest insurance in an
amount equal to 110 per cent. of the Loan, on such terms, through such
insurers and generally in such manner as the Lender may from time to time
consider appropriate and the Borrower shall upon demand fully indemnify
the Lender in respect of all premiums and other expenses which are
incurred in connection with or with a view to effecting, maintaining or
renewing such insurance or dealing with, or considering, any matter
arising out of such insurance.
|
|
12.18
|
Review of insurance
requirements. The Lender shall be entitled to review the
requirements of this Clause 12 from time to time in order to take account
of any changes in circumstances after the date of this Agreement which
are, in the opinion of the Lender, significant and capable of affecting
the Owner or the Ship and their insurance (including, without limitation,
changes in the availability or the cost of insurance coverage or the risks
to which the Owner may be subject), and may appoint insurance consultants
in relation to this review at the cost of the
Borrower.
|
|
12.19
|
Modification of insurance
requirements. The Lender shall notify the Borrower of
any proposed modification under Clause 12.18 to the requirements of this
Clause 12 which the Lender, acting up the advice of their insurance
consultants considers appropriate in the circumstances, and such
modification shall take effect on and from the date it is notified in
writing to the Borrower as an amendment to this Clause 12 and shall bind
the Borrower accordingly.
|
|
12.20
|
Compliance with mortgagee's
instructions. The Lender shall be entitled (without
prejudice to or limitation of any other rights which it may have or
acquire under any Finance Document) to require the Ship to remain at any
safe port or to proceed to and remain at any safe port designated by the
Lender until the Owner implements any amendments to the terms of the
obligatory insurances and any operational changes required as a result of
a notice served under Clause 12.19.
|
30
|
13
|
SHIP
COVENANTS
|
|
13.1
|
General. The
Borrower also undertakes with the Lender to procure that the Owner shall
comply with the following provisions of this Clause 13 at all times during
the Security Period (after the Ship has been delivered to the Owner in
accordance with the MOA) except as the Lender may otherwise
permit.
|
|
13.2
|
Ship's name and
registration. The Borrower shall procure that the Owner
shall keep the Ship owned by it registered in its ownership under the
Xxxxxxxx Islands flag; shall not do or allow to be done anything as a
result of which such registration might be cancelled or imperilled; and
shall not change the name or port of registry of the
Ship.
|
|
13.3
|
Repair and
classification. The Borrower shall procure that the
Owner shall keep the Ship in a good and safe condition and state of
repair:
|
|
(a)
|
consistent
with first-class ship ownership and management
practice;
|
|
(b)
|
so
as to maintain the highest class with Det Norske Veritas (or such other
first-class classification society which is a member of IACS acceptable to
the Lender) free of overdue recommendations and conditions of such
classification society; and
|
|
(c)
|
so
as to comply with all laws and regulations applicable to vessels
registered at ports in the Xxxxxxxx Islands or to vessels trading to any
jurisdiction to which the Ship may trade from time to time, including but
not limited to the ISM Code, the ISPS Code, the ISM Code Documentation and
the ISPS Code Documentation.
|
|
13.4
|
Modification. The
Borrower shall procure that the Owner shall not make any modification or
repairs to, or replacement of, the Ship or equipment installed on her
which would or might materially alter the structure, type or performance
characteristics of the Ship or materially reduce her
value.
|
|
13.5
|
Removal of
parts. The Borrower shall procure that the Owner shall
not remove any material part of the Ship, or any item of equipment
installed on, the Ship unless the part or item so removed is forthwith
replaced by a suitable part or item which is in the same condition as or
better condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Lender and
becomes on installation on the Ship the property of the Owner and subject
to the security constituted by the Mortgage and if applicable, the Deed of
Covenant relative to the Ship Provided that the Owner
may install equipment owned by a third party if the equipment can be
removed without any risk of damage to the
Ship.
|
|
13.6
|
Surveys. The
Borrower shall procure that the Owner shall submit the Ship regularly to
all periodical or other surveys which may be required for classification
purposes and, if so required by the Lender, provide the Lender (at the
expense of the Borrower) with copies of all survey
reports.
|
|
13.7
|
Inspection. The
Borrower shall procure that the Owner shall permit the Lender (by
surveyors or other persons appointed by it for that purpose) to board the
Ship owned by it at all reasonable times to inspect her condition or to
satisfy themselves about proposed or executed repairs and shall afford all
proper facilities for such inspections. All fees and expenses
incurred in relation to the appointment of surveyors shall be for the
account of the Borrower.
|
31
|
13.8
|
Prevention of and release from
arrest. The Borrower shall procure that the Owner shall
promptly discharge:
|
|
(a)
|
all
liabilities which give or may give rise to maritime or possessory liens on
or claims enforceable against the Ship owned by it, her Earnings or her
Insurances;
|
|
(b)
|
all
taxes, dues and other amounts charged in respect of the Ship, her Earnings
or her Insurances; and
|
|
(c)
|
all
other outgoings whatsoever in respect of the Ship, her Earnings or her
Insurances
|
|
|
and,
forthwith upon receiving notice of the arrest of the Ship, or of her
detention in exercise or purported exercise of any lien or claim, the
Owner shall procure her release by providing bail or otherwise
as the circumstances may require.
|
|
13.9
|
Compliance with laws
etc. The Borrower shall procure that the Owner and the
Approved Manager shall:
|
|
(a)
|
comply,
or procure compliance with the ISM Code, the ISPS Code, all Environmental
Laws and all other laws or regulations relating to the Ship owned by the
Owner, its ownership, operation and management or to the business of the
Owner;
|
|
(b)
|
not
employ the Ship nor allow her employment in any manner contrary to any law
or regulation in any relevant jurisdiction including but not limited to
the ISM Code and the ISPS Code; and
|
|
(c)
|
in
the event of hostilities in any part of the world (whether war is declared
or not), not cause or permit the Ship to enter or trade to any zone which
is declared a war zone by any government or by the Ship's war risks
insurers unless the Owner has (at its expense) effected any special,
additional or modified insurance cover required for it to enter or trade
to any war zone.
|
|
13.10
|
Provision of
information. The Borrower shall procure that the Owner
shall promptly provide the Lender with any information which the Lender
requests regarding:
|
|
(a)
|
the
Ship, her employment, position and
engagements;
|
|
(b)
|
the
Earnings and payments and amounts due to the master and crew of the
Ship;
|
|
(c)
|
any
expenses incurred, or likely to be incurred, in connection with the
operation, maintenance or repair of the Ship and any payments made in
respect of the Ship;
|
|
(d)
|
any
towages and salvages;
|
|
(e)
|
its
compliance or the compliance of the Ship with the ISM Code and the ISPS
Code,
|
|
|
and,
upon the Lender's request, provide copies of any current charter relating
to the Ship and of any current charter guarantee, and copies of the ISM
Code Documentation and the ISPS Code
Documentation.
|
32
|
13.11
|
Notification of certain
events. The Borrower shall procure that the Owner shall
immediately notify the Lender by letter
of:
|
|
(a)
|
any
casualty which is or is likely to be or to become a Major
Casualty;
|
|
(b)
|
any
occurrence as a result of which the Ship has become or is, by the passing
of time or otherwise, likely to become a Total
Loss;
|
|
(c)
|
any
requirement or recommendation made by any insurer or classification
society or by any competent authority which is not immediately complied
with;
|
|
(d)
|
any
arrest or detention of the Ship, any exercise or purported exercise of any
lien on the Ship or her Earnings or any requisition of the Ship for
hire;
|
|
(e)
|
any
intended dry docking of the Ship;
|
|
(f)
|
any
Environmental Claim made against the Owner or in connection with the Ship,
or any Environmental Incident;
|
|
(g)
|
any
claim for breach of the ISM Code or the ISPS Code being made against the
Owner, the Approved Manager or otherwise in connection with the Ship;
or
|
|
(h)
|
any
other matter, event or incident, actual or threatened, the effect of which
will or could lead to the ISM Code or the ISPS Code not being complied
with
|
|
|
and
the Borrower shall keep the Lender advised in writing on a regular basis
and in such detail as the Lender shall require of the Owner’s, the
Approved Manager’s or any other person's response to any of
those events or matters.
|
|
13.12
|
Restrictions on chartering,
appointment of managers etc. The Borrower shall procure
that the Owner shall not:
|
|
(a)
|
let
the Ship owned by it on demise charter for any
period;
|
|
(b)
|
other
than the Initial Charterparty or Future Charterparty, enter into any time
or consecutive voyage charter in respect of the Ship for a term which
exceeds, or which by virtue of any optional extensions may exceed, 11
months;
|
|
(c)
|
change
the terms on which the Ship is employed or the identity of the person by
whom the Ship is employed;
|
|
(d)
|
enter
into any charter in relation to the Ship under which more than 2 months'
hire (or the equivalent) is payable in
advance;
|
|
(e)
|
charter
the Ship otherwise than on bona fide arm's length terms at the time when
the Ship is fixed;
|
|
(f)
|
appoint
a manager of the Ship other than the Approved Manager or agree to any
alteration to the terms of the Approved Manager’s
appointment;
|
|
(g)
|
de-activate
or lay up the Ship; or
|
|
(h)
|
put
the Ship into the possession of any person for the purpose of work being
done upon her in an amount exceeding or likely to exceed $250,000 (or the
equivalent in any other currency) unless that person has first given to
the Lender and in terms satisfactory to it a written undertaking not to
exercise any lien on the Ship or her Earnings for the cost of such work or
otherwise.
|
33
|
13.13
|
Notice of
Mortgage. The Borrower shall procure that the Owner
shall keep the Mortgage applicable to the Ship registered against the Ship
as a valid first preferred mortgage, carry on board the Ship a certified
copy of the Mortgage and place and maintain in a conspicuous place in the
navigation room and the Master's cabin of the Ship a framed printed notice
stating that the Ship is mortgaged by the Owner to the
Lender.
|
|
13.14
|
Sharing of
Earnings. The Borrower shall procure that the Owner
shall not:
|
|
(a)
|
enter
into any agreement or arrangement for the sharing of any
Earnings;
|
|
(b)
|
enter
into any agreement or arrangement for the postponement of any date on
which any Earnings are due; the reduction of the amount of any Earnings or
otherwise for the release or adverse alteration of any right of the Owner
to any Earnings; or
|
|
(c)
|
enter
into any agreement or arrangement for the release of, or adverse
alteration to, any guarantee or Security Interest relating to any
Earnings.
|
|
13.15
|
Charterparty
Assignment. If the Owner enters into any Future
Charterparty, the Borrower shall, at the request of the Lender, procure
that the Owner executes in favour of the Lender a Charterparty Assignment
in respect of that Charterparty, and shall deliver to the Lender such
other documents equivalent to those referred to at paragraphs 3, 4 and 5
of Schedule 2, Part A as the Lender may
require.
|
|
14
|
SECURITY
COVER
|
|
14.1
|
Provision of additional
security cover; prepayment of Loan. The Borrower
undertakes with the Lender that if the Lender notifies the Borrower
that:
|
|
(a)
|
the
Market Value of the Ship; plus
|
|
(b)
|
the
net realisable value of any additional security previously provided under
this Clause 14;
|
is
below 125 per cent. of the Loan, the Borrower will, within 14 days after the
date on which the Lender’s notice is served, either:
|
|
(i)
|
provide,
or ensure that a third party provides, additional security which, in the
opinion of the Lender, has a net realisable value at least equal to the
shortfall and which, if it consists of or includes a Security Interest,
covers such asset or assets and is documented in such terms as the Lender
may approve or require; or
|
|
|
(ii)
|
prepay
in accordance with Clause 7 such part (at least) of the Loan as will
eliminate the shortfall.
|
|
14.2
|
Meaning of additional
security. In Clause 14.1 “security” means a
Security Interest over an asset or assets (including, without limitation a
vessel (other than a Ship)) (whether securing the Borrower’s liabilities
under the Finance Documents or a guarantee in respect of those
liabilities), or a guarantee, letter of credit, cash deposit or other
security in respect of the Borrower’s liabilities under the Finance
Documents.
|
34
|
14.3
|
Requirement for additional
documents. The Borrower shall not be deemed to have
complied with Clause 14.1 (i) above until the Lender has received in
connection with the additional security certified copies of documents of
the kinds referred to in paragraphs 3, 4 and 5 of Schedule 2, Part A and
such legal opinions in terms acceptable to the Lender from such lawyers as
they may select.
|
|
14.4
|
Valuation of
Ship. The market value of the Ship at any date is that
shown by a valuation prepared:
|
|
(a)
|
as
at a date not more than 15 days
previously;
|
|
(b)
|
addressed
to the Lender;
|
|
(c)
|
by
an independent ship sale and purchase broker appointed or approved by the
Lender;
|
|
(d)
|
with
or without physical inspection of the Ship (as the Lender may
require);
|
|
(e)
|
on
the basis of a sale for prompt delivery for cash on normal arm's length
commercial terms as between a willing seller and a willing buyer, free of
any existing charter or other contract of employment;
and
|
|
(f)
|
with
or without at the option of the Lender;
and
|
|
(g)
|
after
deducting the estimated amount of the usual and reasonable expenses which
would be incurred in connection with the
sale.
|
|
14.5
|
Value of additional
security. The net realisable value of any additional
security which is provided under Clause 14.1 and which consists of a
Security Interest over a vessel shall be that shown by a valuation
complying with the requirements of Clause
14.4.
|
|
14.6
|
Valuations
binding. Any valuation under Clause 14.4 shall be
binding and conclusive as regards the
Borrower.
|
|
14.7
|
Provision of
information. The Borrower shall promptly provide the
Lender and any independent ship sale and purchase shipbroker or expert
acting under Clause 14.4 with any information which the Lender or the
shipbroker or expert may request for the purposes of the valuation; and,
if the Borrower fails to provide within 3 Business Days following such
request, the valuation may be made on any basis and assumptions which the
independent ship sale and purchase shipbroker or the Lender (or the expert
appointed by it) considers prudent.
|
|
14.8
|
Payment of valuation
expenses. Without prejudice to the generality of the
Borrower’s obligations under Clauses 19.2, 19.3 and 20.3, the Borrower
shall, on demand, pay the Lender the amount of the fees and expenses of
any shipbroker or expert instructed by the Lender under this
Clause.
|
|
15
|
PAYMENTS
AND CALCULATIONS
|
|
15.6
|
Currency and method of
payments. All payments to be made by the Borrower to the
Lender under a Finance Document shall be made to the
Lender:
|
|
(a)
|
by
not later than 11.00 a.m. (Piraeus time) on the due
date;
|
|
(b)
|
in
same day Dollar funds settled through the New York Clearing House
Interbank Payments System (or in such other Dollar funds and/or settled in
such other manner as the Lender shall specify as being customary at the
time for the settlement of international transactions of the type
contemplated by this Agreement);
and
|
35
|
(c)
|
to
the account of the Lender at Bank of New York, USA or credit to the
account of the Lender (Account No 8033138548), or to such other account
with such other bank as the Lender may from time to time notify to the
Borrower.
|
|
15.7
|
Payment on non-Business
Day. If any payment by the Borrower under a Finance
Document would otherwise fall due on a day which is not a Business
Day:
|
|
(a)
|
the
due date shall be extended to the next succeeding Business Day;
or
|
|
(b)
|
if
the next succeeding Business Day falls in the next calendar month, the due
date shall be brought forward to the immediately preceding Business
Day,
|
and
interest shall be payable during any extension under paragraph (a) at the rate
payable on the original due date.
|
15.8
|
Basis for calculation of
periodic payments. All interest and any other payments
under any Finance Document which are of an annual or periodic nature shall
accrue from day to day and shall be calculated on the basis of the actual
number of days elapsed and a 360 day
year.
|
|
15.9
|
Lender
accounts. The Lender shall maintain an account showing
the amounts advanced by the Lender and all other sums owing to the Lender
from the Borrower and each Security Party under the Finance Documents and
all payments in respect of those amounts made by the Borrower and any
Security Party.
|
|
15.10
|
Accounts prima facie
evidence. If the account maintained under Clauses 15.9
shows an amount to be owing by the Borrower or a Security Party to the
Lender, that account shall be prima facie evidence that that amount is
owing to the Lender.
|
|
16
|
APPLICATION
OF RECEIPTS
|
|
16.1
|
Normal order of
application. Except as any Finance Document may
otherwise provide, any sums which are received or recovered by the Lender
under or by virtue of any Finance Document shall be
applied:
|
|
(a)
|
FIRST:
in or towards satisfaction of any amounts then due and payable under the
Finance Documents in the following
proportions:
|
|
|
(i)
|
first,
in or towards satisfaction pro rata of all amounts then due and payable to
the Lender under the Finance Documents other than those amounts referred
to at (ii) and (iii) below (including, but without limitation, all amounts
payable by the Borrowers under Clauses 19, 20 and 21 of this Agreement or
by the Borrower or any Security Party under any corresponding or similar
provision in any other Finance
Document);
|
|
|
(ii)
|
secondly,
in or towards satisfaction pro rata of any and all amounts of interest or
default interest payable to the Lender under the Finance Document (but
shall have failed to pay or deliver to the Lender at the time of
application or distribution under this Clause 16);
and
|
|
|
(iii)
|
thirdly,
in or towards satisfaction of the
Loan;
|
36
|
(b)
|
SECONDLY:
in retention of an amount equal to any amount not then due and payable
under any Finance Document but which the Lender, by notice to the Borrower
and the Security Parties, states in its opinion will or may become due and
payable in the future and, upon those amounts becoming due and payable, in
or towards satisfaction of them in accordance with the foregoing
provisions of this Clause 16.1; and
|
|
(c)
|
THIRDLY:
any surplus shall be paid to the Borrower or to any other person appearing
to be entitled to it.
|
|
16.2
|
Variation of order of
application. The Lender may, by notice to the Borrower
and the Security Parties, provide for a different manner of application
from that set out in Clause 16.1 either as regards a specified sum or
sums or as regards sums in a specified category or
categories.
|
|
16.3
|
Notice of variation of order of
application. The Lender may give notices under
Clause 16.2 from time to time; and such a notice may be stated to
apply not only to sums which may be received or recovered in the future,
but also to any sum which has been received or recovered on or after the
third Business Day before the date on which the notice is
served.
|
|
16.4
|
Appropriation rights
overridden. This Clause 16 and any notice which the
Lender gives under Clause 16.2 shall override any right of
appropriation possessed, and any appropriation made, by the Borrower or
any Security Party.
|
|
17
|
APPLICATION
OF EARNINGS
|
|
17.1
|
Payment of
Earnings. The Borrower undertakes with the Lender to
ensure that throughout the Security Period (subject only to provisions of
the General Assignment), all the Earnings of the Ship are paid to the
Earnings Account.
|
|
17.2
|
Location of
accounts. The Borrower shall
promptly:
|
|
(a)
|
comply,
and ensure that the Owner complies, with any requirement of the Lender as
to the location or re-location of the Earnings Account;
and
|
|
(b)
|
execute,
and ensure that the Owner executes, any documents which the Lender
specifies to create or maintain in favour of the Lender a Security
Interest over (and/or rights of set-off, consolidation or other rights in
relation to) the Earnings Account.
|
|
17.3
|
Interest accrued on Earnings
Account. Any credit balance on the Earnings Account
shall bear interest at the rate from time to time offered by the Lender to
its customers for Dollar deposits of similar amounts and for periods
similar to those for which such balances appear to the Lender likely to
remain on the Earnings Account.
|
|
17.4
|
Release of accrued
interest. Interest accruing under Clause 17.2 shall be
freely available to the Owner.
|
|
17.5
|
Debits for expenses
etc. The Lender shall be entitled (but not obliged) from
time to time to debit the Earnings Account without prior notice in order
to discharge any amount due and payable to it under Clause 19 or 20 or
payment of which it has become entitled to demand under Clause 19 or
20.
|
|
17.6
|
Borrower’s obligations
unaffected. The provisions of this Clause 17 do not
affect:
|
|
(a)
|
the
liability of the Borrower to make payments of principal and interest on
the due dates; or
|
37
|
(b)
|
any
other liability or obligation of the Borrower or any Security Party under
any Finance Document.
|
|
18
|
EVENTS
OF DEFAULT
|
|
18.1
|
Events of
Default. An Event of Default occurs
if:
|
|
(a)
|
the
Borrower or any Security Party fails to pay when due or if so payable on
demand, within 2 Business Days of such demand, any sum payable
under a Finance Document or under any document relating to a Finance
Document unless such failure is due to a bank payment transmission error;
or
|
|
(b)
|
any
breach occurs of Clause 8.2, 10.2, 10.3, 10.16, 10.17, 11.2, 11.3, 11.5,
14.1 or 17.1; or
|
|
(c)
|
any
breach by the Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a) or (b)
above if, in the opinion of the Lender, such default is capable of remedy
and such default continues unremedied 10 Business Days after written
notice from the Lender requesting action to remedy the same;
or
|
|
(d)
|
(subject
to any applicable grace period specified in any Finance Document) any
breach by the Borrower or any Security Party occurs of any provision of a
Finance Document (other than a breach covered by paragraphs (a), (b) or
(c) above); or
|
|
(e)
|
any
representation, warranty or statement made by, or by an officer of, the
Borrower or a Security Party in a Finance Document or in the Drawdown
Notice or any other notice or document relating to a Finance Document is
untrue or misleading when it is made;
or
|
|
(f)
|
any
of the following occurs in relation to any Financial Indebtedness of a
Relevant Person (exceeding, in the case of the Borrower, $1,000,000 (or
the equivalent in any other currency), in aggregate:.
|
|
(i)
|
any
Financial Indebtedness of a Relevant Person is not paid when due or, if so
payable, on demand; or
|
|
|
|
(ii)
|
any
Financial Indebtedness of a Relevant Person becomes due and payable or
capable of being declared due and payable prior to its stated maturity
date as a consequence of any event of default;
or
|
|
|
(iii)
|
a
lease, hire purchase agreement or charter creating any Financial
Indebtedness of a Relevant Person is terminated by the lessor or owner or
becomes capable of being terminated as a consequence of any termination
event; or
|
|
|
(iv)
|
any
overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other
derivative contract or transaction, relating to any Financial Indebtedness
of a Relevant Person ceases to be available or becomes capable of being
terminated as a result of any event of default, or cash cover is required,
or becomes capable of being required, in respect of such a facility as a
result of any event of default; or
|
|
|
(v)
|
any
Security Interest securing any Financial Indebtedness of a Relevant Person
becomes enforceable; or
|
38
|
(g)
|
any
of the following occurs in relation to a Relevant
Person:
|
|
|
(i)
|
a
Relevant Person becomes, in the opinion of the Lender, unable to pay its
debts as they fall due; or
|
|
|
(ii)
|
any
assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress in respect of a sum of, or
sums aggregating, $1,000,000 or more or the equivalent in another
currency; or
|
|
|
(iii)
|
any
administrative or other receiver is appointed over any asset of a Relevant
Person; or
|
|
|
(iv)
|
a
Relevant Person makes any formal declaration of bankruptcy or any formal
statement to the effect that it is insolvent or likely to become
insolvent, or a winding up or administration order is made in relation to
a Relevant Person, or the members or directors of a Relevant Person pass a
resolution to the effect that it should be wound up, placed in
administration or cease to carry on business, save that this paragraph
does not apply to a fully solvent winding up of a Relevant Person other
than the Borrower which is, or is to be, effected for the purposes of an
amalgamation or reconstruction previously approved by the Lender and
effected not later than 3 months after the commencement of the winding up;
or
|
|
|
(v)
|
a
petition is presented in any Pertinent Jurisdiction for the winding up or
administration, or the appointment of a provisional liquidator, of a
Relevant Person; or
|
|
|
(vi)
|
a
Relevant Person petitions a court, or presents any proposal for, any form
of judicial or non-judicial suspension or deferral of payments,
reorganisation of its debt (or certain of its debt) or arrangement with
all or a substantial proportion (by number or value) of its creditors or
of any class of them or any such suspension or deferral of payments,
reorganisation or arrangement is effected by court order, contract or
otherwise; or
|
|
|
|
|||
|
(vii)
|
any
meeting of the members or directors of a Relevant Person is summoned for
the purpose of considering a resolution or proposal to authorise or take
any action of a type described in paragraphs (iii), (iv), (v) or (vi)
above; or
|
||
|
(viii)
|
in
a Pertinent Jurisdiction other than England, any event occurs or any
procedure is commenced which, in the opinion of the Lender, is similar to
any of the foregoing; or
|
|
(h)
|
the
Borrower or any Security Party ceases or suspends carrying on or changes
the nature of its business or a part of its business which, in the opinion
of the Lender, is material in the context of this Agreement;
or
|
|
(i)
|
it
becomes unlawful in any Pertinent Jurisdiction or
impossible:
|
|
|
(i)
|
for
the Borrower or any Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Lender
considers material under a Finance Document;
or
|
|
|
(ii)
|
for
the Lender to exercise or enforce any right under, or to enforce any
Security Interest created by, a Finance Document;
or
|
39
|
(j)
|
any
consent necessary to enable the Owner to own, operate or charter the Ship
or to enable the Borrower or any Security Party to comply with any
provision which the Lender considers material of a Finance Document or the
MOA is not granted, expires without being renewed, is revoked or becomes
liable to revocation or any condition of such a consent is not fulfilled;
or
|
|
(k)
|
without
the prior consent of the Lender, Mr. Prokopios Tsirigakis ceases to be, at
any time during the Security Period, the Chief Executive Officer of the
Borrower; or
|
|
(l)
|
the
shares of the Borrower cease to be quoted on the Nasdaq National Market in
New York or any other international recognised stock exchange acceptable
to the Lender; or
|
|
(m)
|
without
the prior written consent or the Lender, a change has occurred after the
date of this Agreement in the ownership of any of the shares in the Owner
or in the ultimate control of the voting rights attaching to any of those
shares; or
|
|
(n)
|
the
Initial Charterparty is terminated, cancelled, suspended, rescinded or
revoked or otherwise ceases to remain in full force and effect for any
reason except with the consent of the Lender or by effluxion of time
unless a replacement charter in all respects acceptable to the Lender, to
be made between the Owner and a charterer acceptable to the Lender, is
effected within 60 days of the cancellation or termination of the Initial
Charterparty or the date on which the Initial Charterparty ceases to
remain in full force and effect or being negotiated;
or
|
|
(o)
|
any
provision which the Lender considers material of a Finance Document proves
to have been or becomes invalid or unenforceable, or a Security Interest
created by a Finance Document proves to have been or becomes invalid or
unenforceable or such a Security Interest proves to have ranked after, or
loses its priority to, another Security Interest or any other third party
claim or interest; or
|
|
(p)
|
the
security constituted by a Finance Document is in any way imperilled or in
jeopardy; or
|
|
(q)
|
any
other event occurs or any other circumstances arise or develop including,
without limitation:
|
|
(i)
|
a
change in the financial position, state of affairs or prospects of the
Borrower or any Security Party; or
|
|
|
(ii)
|
any
accident or other event involving the Ship or another vessel owned,
chartered or operated by a Relevant Person;
|
|
in
the light of which the Lender considers that there is a significant risk that
the Borrower or any Security Party is, or will later become, unable to discharge
its liabilities under the Finance Documents as they fall due.
|
18.2
|
Actions following an Event of
Default. On, or at any time after, the occurrence of an
Event of Default the Lender may:
|
|
(a)
|
serve
on the Borrower a notice stating that the commitment and all obligations
of the Lender to the Borrower under this Agreement are terminated;
and/or
|
40
|
(b)
|
serve
on the Borrower a notice stating that the Loan, all accrued interest and
all other amounts accrued or owing under this Agreement are immediately
due and payable or are due and payable on demand;
and/or
|
|
(c)
|
take
any other action which, as a result of the Event of Default or any notice
served under paragraph (a) or (b) above, the Lender is entitled to take
under any Finance Document or any applicable
law.
|
|
18.3
|
Termination of
Commitment. On the service of a notice under
Clause 18.2(a) the Commitment, and all other obligations of the
Lender to the Borrower under this Agreement, shall
terminate.
|
|
18.4
|
Acceleration of
Loan. On the service of a notice under
Clause 18.2(b), the Loan, all accrued interest and all other amounts
accrued or owing from the Borrower or any Security Party under this
Agreement and every other Finance Document shall become immediately due
and payable or, as the case may be, payable on
demand.
|
|
18.5
|
Multiple notices; action
without notice. The Lender may serve notices Clauses
18.2(a) and (b) simultaneously or on different dates and it may take any
action referred to in Clause 18.2 if no such notice is served or
simultaneously with or at any time after the service of both or either of
such notices.
|
|
18.6
|
Exclusion of Lender
liability. Neither the Lender nor any receiver or
manager appointed by the Lender, shall have any liability to the Borrower
or a Security Party:
|
|
(a)
|
for
any loss caused by an exercise of rights under, or enforcement of a
Security Interest created by, a Finance Document or by any failure or
delay to exercise such a right or to enforce such a Security Interest;
or
|
|
(b)
|
as
mortgagee in possession or otherwise, for any income or principal amount
which might have been produced by or realised from any asset comprised in
such a Security Interest or for any reduction (however caused) in the
value of such an asset,
|
except
that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused by the gross negligence or the wilful
misconduct of the Lender's own officers and employees or (as the case may be)
such receiver's or manager's own partners or employees.
|
18.7
|
Relevant
Persons. In this Clause 18 a “Relevant Person” means
the Borrower, any Security Party and any other member of the Group; but
excluding any company which is dormant and the value of whose gross assets
is $50,000 or less.
|
|
18.8
|
Interpretation. In
Clause 18.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of
default in a facility agreement or a termination event in a finance lease;
and in Clause 18.1(g) “petition” includes an
application.
|
|
19
|
FEES
AND EXPENSES
|
|
19.1
|
Arrangement
fee. The Borrower shall pay on the date of this
Agreement to the Lender a non-refundable arrangement fee of $140,000
(representing 0.4 per cent. of the
Commitment).
|
41
|
19.2
|
Costs of negotiation,
preparation etc. The Borrower shall pay to the Lender on
its demand the amount of all expenses incurred by the Lender in connection
with the negotiation, preparation, execution or registration of any
Finance Document or any related document or with any transaction
contemplated by a Finance Document or a related document (including,
without limitation, any legal fees or expenses incurred by the Lender
with).
|
|
19.3
|
Costs of variations,
amendments, enforcement etc. The Borrower shall pay to
the Lender, on the Lender's demand, the amount of all expenses (including
without limitation any legal fees or expenses) incurred by the Lender in
connection with:
|
|
(a)
|
any
amendment or supplement to a Finance Document, or any proposal for such an
amendment to be made;
|
|
(b)
|
any
consent or waiver by the Lender concerned under or in connection with a
Finance Document, or any request for such a consent or
waiver;
|
|
(c)
|
the
valuation of any security provided or offered under Clause 14 or any
other matter relating to such security;
or
|
|
(d)
|
such
circumstances where the Lender, in its absolute opinion, considers that
there has been a material change to the insurances in respect of the Ship,
the review of the insurances of the Ship pursuant to Clause
12.18;
|
|
(e)
|
any
step taken by the Lender with a view to the protection, exercise or
enforcement of any right or Security Interest created by a Finance
Document or for any similar
purpose.
|
There
shall be recoverable under paragraph (d) the full amount of all legal
expenses, whether or not such as would be allowed under rules of court or any
taxation or other procedure carried out under such rules.
|
19.4
|
Documentary
taxes. The Borrower shall promptly pay any tax payable
on or by reference to any Finance Document, and shall, on the Lender's
demand, fully indemnify the Lender against any liabilities and expenses
resulting from any failure or delay by the Borrower to pay such a
tax.
|
|
19.5
|
Certification of
amounts. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 19 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is
due.
|
|
20
|
INDEMNITIES
|
|
20.1
|
Indemnities regarding borrowing
and repayment of Loan. The Borrower shall fully
indemnify the Lender on its demand in respect of all expenses, liabilities
and losses which are incurred by the Lender, or which the Lender
reasonably and with due diligence estimates that it will incur, as a
result of or in connection with:
|
|
(a)
|
the
Loan not being borrowed on the date specified in the Drawdown Notice for
any reason other than a default by the
Lender;
|
|
(b)
|
the
receipt or recovery of all or any part of the Loan or an overdue sum
otherwise than on the last day of an Interest Period or other relevant
period;
|
42
|
(c)
|
any
failure (for whatever reason) by the Borrower to make payment of any
amount due under a Finance Document on the due date or, if so payable, on
demand (after giving credit for any default interest paid by the Borrower
on the amount concerned under
Clause 6);
|
|
(d)
|
the
occurrence and/or continuance of an Event of Default or a Potential Event
of Default and/or the acceleration of repayment of the Loan under
Clause 18,
|
and
in respect of any tax (other than tax on its overall net income) for which the
Lender is liable in connection with any amount paid or payable to the Lender
(whether for its own account or otherwise) under any Finance
Document.
|
20.2
|
Breakage
costs. Without limiting its generality, Clause 20.1
covers any liability or loss, including a loss of a prospective profit,
incurred by the Lender:
|
|
(a)
|
in
liquidating or employing deposits from third parties acquired or arranged
to fund or maintain all or any part of the Loan and/or any overdue amount
(or an aggregate amount which includes the Loan or any overdue amount);
and
|
|
(b)
|
in
terminating, or otherwise in connection with, any interest and/or currency
swap or any other transaction entered into (whether with another legal
entity or with another office or department of the Lender) to hedge any
exposure arising under this Agreement or a number of transactions of which
this Agreement is one.
|
|
20.3
|
Miscellaneous
indemnities. The Borrower shall fully indemnify the
Lender on its demand in respect of all claims, demands, proceedings,
liabilities, taxes, losses and expenses or every king (“liability items”)
which may be made or brought against or incurred by the Lender, in any
country, in relation to:
|
|
(a)
|
any
action taken, or omitted or neglected to be taken, under or in connection
with any Finance Document by the Lender or by any receiver appointed under
a Finance Document;
|
|
(b)
|
any
other event, matter or question which occurs or arises at any time during
the Security Period and which has any connection with, or any bearing on,
any Finance Document, any payment or other transaction relating to a
Finance Document or any asset covered (or previously covered) by a
Security Interest created (or intended to be created) by a Finance
Document,
|
other
than claims, expenses, liabilities and losses which are shown to have been
directly and mainly caused by the dishonesty or wilful misconduct of the
officers or employees of the Lender.
Without
prejudice to its generality, this Clause 20.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with
any law relating to safety at sea, the ISM Code, the ISPS Code or any
Environmental Law.
|
20.4
|
Currency
indemnity. If any sum due from the Borrower or any
Security Party to the Lender under a Finance Document or under any order
or judgment relating to a Finance Document has to be converted from the
currency in which the Finance Document provided for the sum to be paid
(the “Contractual
Currency”) into another currency (the “Payment Currency”) for
the purpose of:
|
|
(a)
|
making
or lodging any claim or proof against the Borrower or any Security Party,
whether in its liquidation, any arrangement involving it or otherwise;
or
|
43
|
(b)
|
obtaining
an order or judgment from any court or other tribunal;
or
|
|
(c)
|
enforcing
any such order or judgment,
|
the
Borrower shall indemnify the Lender against the loss arising when the amount of
the payment actually received by the Lender is converted at the available rate
of exchange into the Contractual Currency.
In
this Clause 20.4, the “available rate of exchange”
means the rate at which the Lender is able at the opening of business (Piraeus
time) on the Business Day after it receives the sum concerned to purchase the
Contractual Currency with the Payment Currency.
This
Clause 20.4 creates a separate liability of the Borrower which is distinct
from its other liabilities under the Finance Documents and which shall not be
merged in any judgment or order relating to those other
liabilities.
|
20.5
|
Certification of
amounts. A notice which is signed by 2 officers of the
Lender, which states that a specified amount, or aggregate amount, is due
to the Lender under this Clause 20 and which indicates (without
necessarily specifying a detailed breakdown) the matters in respect of
which the amount, or aggregate amount, is due shall be prima facie
evidence that the amount, or aggregate amount, is
due.
|
|
21
|
NO
SET-OFF OR TAX DEDUCTION
|
|
21.1
|
No
deductions. All amounts due from the Borrower under a
Finance Document shall be paid:
|
|
(a)
|
without
any form of set-off, cross-claim or condition;
and
|
|
(b)
|
free
and clear of any tax deduction except a tax deduction which the Borrower
is required by law to make.
|
|
21.2
|
Grossing-up for
taxes. If the Borrower is required by law to make a tax
deduction from any payment:
|
|
(a)
|
the
Borrower shall notify the Lender as soon as it becomes aware of the
requirement;
|
|
(b)
|
the
Borrower shall pay the tax deducted to the appropriate taxation authority
promptly, and in any event before any fine or penalty arises;
and
|
|
(c)
|
the
amount due in respect of the payment shall be increased by the amount
necessary to ensure that the Lender receives and retains (free from any
liability relating to the tax deduction) a net amount which, after the tax
deduction, is equal to the full amount which it would otherwise have
received.
|
|
21.3
|
Evidence of payment of
taxes. Within one month after making any tax deduction,
the Borrower shall deliver to the Lender documentary evidence satisfactory
to the Lender that the tax had been paid to the appropriate taxation
authority.
|
44
|
21.4
|
Exclusion of tax on overall net
income. In this Clause 21 “tax deduction” means any
deduction or withholding for or on account of any present or future tax
except tax on the Lender's overall net
income.
|
|
22
|
ILLEGALITY,
ETC
|
|
22.1
|
Illegality. This
Clause 22 applies if the Lender notifies the Borrower that it has
become, or will with effect from a specified date,
become:
|
|
(a)
|
unlawful
or prohibited as a result of the introduction of a new law, an amendment
to an existing law or a change in the manner in which an existing law is
or will be interpreted or applied;
or
|
|
(b)
|
contrary
to, or inconsistent with, any
regulation,
|
for
the Lender to maintain or give effect to any of its obligations under this
Agreement in the manner contemplated by this Agreement.
|
22.2
|
Notification and effect of
illegality. On the Lender notifying the Borrower under
Clause 22.1, the Commitment shall terminate; and thereupon or, if
later, on the date specified in the Lender's notice under Clause 22.1
as the date on which the notified event would become effective the
Borrower shall prepay the Loan in full in accordance with
Clause 7.
|
|
22.3
|
Mitigation. If
circumstances arise which would result in a notification under
Clause 22.1 then, without in any way limiting the rights of the
Lender under Clause 22.3, the Lender shall use reasonable endeavours
to transfer its obligations, liabilities and rights under this Agreement
and the Finance Documents to another office or financial institution not
affected by the circumstances but the Lender shall not be under any
obligation to take any such action if, in its opinion, to do would or
might:
|
|
(a)
|
have
an adverse effect on its business, operations or financial condition;
or
|
|
(b)
|
involve
it in any activity which is unlawful or prohibited or any activity that is
contrary to, or inconsistent with, any regulation;
or
|
|
(c)
|
involve
it in any expense (unless indemnified to its satisfaction) or tax
disadvantage.
|
|
23
|
INCREASED
COSTS
|
|
23.1
|
Increased
costs. This Clause 23 applies if the Lender
notifies the Borrower that it considers that as a result
of:
|
|
(a)
|
the
introduction or alteration after the date of this Agreement of a law or an
alteration after the date of this Agreement in the manner in which a law
is interpreted or applied (disregarding any effect which relates to the
application to payments under this Agreement of a tax on the Lender's
overall net income); or
|
|
(b)
|
complying
with any regulation (including any which relates to capital adequacy or
liquidity controls or which affects the manner in which the Lender
allocates capital resources to its obligations under this Agreement
(including, without limitation, any laws or regulations which shall
replace, amend and/or supplement those set out in the statement of the
Basle Committee on Banking Regulations and Supervisory Practices dated
July 1988 and entitled “International Convergence of Capital Management
and Capital Structures”)) which is introduced, or altered, or the
interpretation or application of which is altered, after the date of this
Agreement,
|
45
the
Lender (or a parent company of it) has incurred or will incur an “increased cost”.
|
23.2
|
Meaning of “increased
cost”. In this Clause 23, “increased cost”
means:
|
|
(a)
|
an
additional or increased cost incurred as a result of, or in connection
with, the Lender having entered into, or being a party to, this Agreement
or having taken an assignment of rights under this Agreement, of funding
or maintaining the Commitment or performing its obligations under this
Agreement, or of having outstanding all or any part of the Loan or other
unpaid sums; or
|
|
(b)
|
a
reduction in the amount of any payment to the Lender under this Agreement
or in the effective return which such a payment represents to the Lender
or on its capital;
|
|
(c)
|
an
additional or increased cost of funding all or maintaining all or any of
the advances comprised in a class of advances formed by or including the
Loan or (as the case may require) the proportion of that cost attributable
to the Loan; or
|
|
(d)
|
a
liability to make a payment, or a return foregone, which is calculated by
reference to any amounts received or receivable by the Lender under this
Agreement;
|
but
not an item attributable to a change in the rate of tax on the overall net
income of the Lender (or a parent company of it) or an item covered by the
indemnity for tax in Clause 20.1 or by Clause 21.
For
the purposes of this Clause 23.2 the Lender may in good faith allocate or
spread costs and/or losses among its assets and liabilities (or any class
thereof) on such basis as it considers appropriate.
|
23.3
|
Payment of increased
costs. The Borrower shall pay to the Lender, on its
demand, the amounts which the Lender from time to time notifies the
Borrower that it has specified to be necessary to compensate it for the
increased cost.
|
|
23.4
|
Notice of
prepayment. If the Borrower is not willing to continue
to compensate the Lender for the increased cost under Clause 23.3,
the Borrower may give the Lender not less than 14 days' notice of its
intention to prepay the Loan at the end of an Interest
Period.
|
|
23.5
|
Prepayment. A
notice under Clause 23.4 shall be irrevocable; and on the date
specified in the Borrower’s notice of intended prepayment, the Commitment
shall terminate and the Borrower shall prepay (without premium or penalty)
the Loan, together with accrued interest thereon at the applicable rate
plus the Margin.
|
|
23.6
|
Application of
prepayment. Clause 7 shall apply in relation to the
prepayment.
|
|
24
|
SET-OFF
|
|
24.1
|
Application of credit
balances. The Lender may without prior
notice:
|
|
(a)
|
apply
any balance (whether or not then due) which at any time stands to the
credit of any account in the name of the Borrower at any office in any
country of the Lender in or towards satisfaction of any sum then due from
the Borrower to the Lender under any of the Finance Documents;
and
|
46
|
(b)
|
for
that purpose:
|
|
|
(i)
|
break,
or alter the maturity of, all or any part of a deposit of the
Borrower;
|
|
|
(ii)
|
convert
or translate all or any part of a deposit or other credit balance into
Dollars; and
|
|
|
(iii)
|
enter
into any other transaction or make any entry with regard to the credit
balance which the Lender considers
appropriate.
|
|
24.2
|
Existing rights
unaffected. The Lender shall not be obliged to exercise
any of its rights under Clause 24.1; and those rights shall be
without prejudice and in addition to any right of set-off, combination of
accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any
document).
|
|
24.3
|
No Security
Interest. This Clause 24 gives the Lender a contractual
right of set-off only, and does not create any equitable charge or other
Security Interest over any credit balance of the
Borrower.
|
|
25
|
TRANSFERS
AND CHANGES IN LENDING OFFICE
|
|
25.1
|
Transfer by
Borrower. The Borrower may not, without the consent of
the Lender, transfer any of its rights or obligations under any Finance
Document.
|
|
25.2
|
Assignment by
Lender. The Lender may assign all or any of the rights
and interests which it has under or by virtue of the Finance Documents to
another bank or financial
institution.
|
|
25.3
|
Rights of
assignee. In respect of any breach of a warranty,
undertaking, condition or other provision of a Finance Document, or any
misrepresentation made in or in connection with a Finance Document, a
direct or indirect assignee of any of the Lender's rights or interests
under or by virtue of the Finance Documents shall be entitled to recover
damages by reference to the loss incurred by that assignee as a result of
the breach or misrepresentation irrespective of whether the Lender would
have incurred a loss of that kind or
amount.
|
|
25.4
|
Sub-participation; subrogation
assignment. The Lender may sub-participate all or any
part of its rights and/or obligations under or in connection with the
Finance Documents without the consent of, or any notice to, the Borrower;
and the Lender may assign, in any manner and terms agreed by it, all or
any part of those rights to an insurer or surety who has become subrogated
to them.
|
|
25.5
|
Disclosure of
information. The Lender may disclose to a potential
assignee or sub-participant any information which the Lender has received
in relation to the Borrower, any Security Party or their affairs under or
in connection with any Finance Document, unless the information is clearly
of a confidential nature.
|
|
25.6
|
Change of lending
office. The Lender may change its lending office by
giving notice to the Borrower and the change shall become effective on the
later of:
|
|
(a)
|
the
date on which the Borrower receives the notice;
and
|
47
|
(b)
|
the
date, if any, specified in the notice as the date on which the change will
come into effect.
|
|
26
|
VARIATIONS
AND WAIVERS
|
|
26.1
|
Variations, waivers etc. by
Lender. A document shall be effective to vary, waive,
suspend or limit any provision of a Finance Document, or the Lender's
rights or remedies under such a provision or the general law, only if the
document is signed, or specifically agreed to by fax, by the Borrower and
the Lender and, if the document relates to a Finance Document to which a
Security Party is party, by that Security
Party.
|
|
26.2
|
Exclusion of other or implied
variations. Except for a document which satisfies the
requirements of Clause 26.1, no document, and no act, course of
conduct, failure or neglect to act, delay or acquiescence on the part of
the Lender (or any person acting on its behalf) shall result in the Lender
(or any person acting on its behalf) being taken to have varied, waived,
suspended or limited, or being precluded (permanently or temporarily) from
enforcing, relying on or
exercising:
|
|
(a)
|
a
provision of this Agreement or another Finance Document;
or
|
|
(b)
|
an
Event of Default; or
|
|
(c)
|
a
breach by the Borrower or a Security Party of an obligation under a
Finance Document or the general law;
or
|
|
(d)
|
any
right or remedy conferred by any Finance Document or by the general
law,
|
and
there shall not be implied into any Finance Document any term or condition
requiring any such provision to be enforced, or such right or remedy to be
exercised, within a certain or reasonable time.
|
27
|
NOTICES
|
|
27.1
|
General. Unless
otherwise specifically provided, any notice under or in connection with
any Finance Document shall be given by registered letter or fax; and
references in the Finance Documents to written notices, notices in writing
and notices signed by particular persons shall be construed
accordingly.
|
|
27.2
|
Addresses for
communications. A notice shall be
sent:
|
| (a) | to the Borrower: | Aethrion Centre | ||
| 40 Ag. Xxxxxxxxxxxx Xxxxxx | ||||
| 000 00 Xxxxxxx | ||||
| Xxxxxx, Xxxxxx | ||||
| Fax No: + 30 210 61 95 819 | ||||
| Attn: the Chief Financial Officer | ||||
| (b) | to the Lender: | Piraeus Bank A.E. | ||
| 00-00 Xxxx Xxxxxxx | ||||
| 000 00 Xxxxxxx | ||||
| Xxxxxx | ||||
| Fax No: x00 000 00 0 0000 | ||||
| Attn: Relationship Manager |
or
to such other address as the relevant party may notify the other.
48
|
27.3
|
Effective date of
notices. Subject to Clauses 27.4
and 27.5:
|
|
(a)
|
a
notice which is delivered personally shall be deemed to be served, and
shall take effect, at the time when it is delivered;
and
|
|
(b)
|
a
notice which is delivered by registered letter shall be deemed to be
served, and shall take effect, 5 Business Days after being deposited in
the post postage prepaid in an envelope addressed to it at the relevant
address; and
|
|
(c)
|
a
notice which is sent by fax shall be deemed to be served, and shall take
effect, 2 hours after its transmission is
completed.
|
|
27.4
|
Service outside business
hours. However, if under Clause 27.3 a notice would
be deemed to be served:
|
|
(a)
|
on
a day which is not a Business Day in the place of receipt;
or
|
|
(b)
|
on
such a Business Day, but after 5 p.m. local
time,
|
the
notice shall (subject to Clause 27.5) be deemed to be served, and shall
take effect, at 9 a.m. on the next day which is such a business
day.
|
27.5
|
Illegible
notices. Clauses 27.3 and 27.4 do not apply if
the recipient of a notice notifies the sender within 1 hour after the time
at which the notice would otherwise be deemed to be served that the notice
has been received in a form which is illegible in a material
respect.
|
|
27.6
|
Valid
notices. A notice under or in connection with a Finance
Document shall not be invalid by reason that its contents or the manner of
serving it do not comply with the requirements of this Agreement or, where
appropriate, any other Finance Document under which it is served
if:
|
|
(a)
|
the
failure to serve it in accordance with the requirements of this Agreement
or other Finance Document, as the case may be, has not caused any party to
suffer any significant loss or prejudice;
or
|
|
(b)
|
in
the case of incorrect and/or incomplete contents, it should have been
reasonably clear to the party on which the notice was served what the
correct or missing particulars should have
been.
|
|
27.7
|
English
language. Any notice under or in connection with a
Finance Document shall be in
English.
|
|
27.8
|
Meaning of
“notice”. In this Clause 28 “notice” includes any
demand, consent, authorisation, approval, instruction, waiver or other
communication.
|
49
|
28
|
SUPPLEMENTAL
|
|
28.1
|
Rights cumulative,
non-exclusive. The rights and remedies which the Finance
Documents give to the Lender are:
|
|
(a)
|
cumulative;
|
|
(b)
|
may
be exercised as often as appears expedient;
and
|
|
(c)
|
shall
not, unless a Finance Document explicitly and specifically states so, be
taken to exclude or limit any right or remedy conferred by any
law.
|
|
28.2
|
Severability of
provisions. If any provision of a Finance Document is or
subsequently becomes void, unenforceable or illegal, that shall not affect
the validity, enforceability or legality of the other provisions of that
Finance Document or of the provisions of any other Finance
Document.
|
|
28.3
|
Third party
rights. A person who is not a party to this Agreement
has no right under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce or to enjoy the benefit of any term of this
Agreement.
|
|
28.4
|
Counterparts. A
Finance Document may be executed in any number of
counterparts.
|
|
29
|
LAW
AND JURISDICTION
|
|
29.1
|
English
law. This Agreement shall be governed by, and construed
in accordance with, English law.
|
|
29.2
|
Exclusive English
jurisdiction. Subject to Clause 29.3, the courts of
England shall have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with this
Agreement.
|
|
29.3
|
Choice of forum for the
exclusive benefit of the Lender. Clause 29.2 is for
the exclusive benefit of the Lender, which reserves the
right:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England. The Borrower shall not
commence any proceedings in any country other than England in relation to
a matter which arises out of or in connection with this
Agreement.
|
|
29.4
|
Process
agent. The Borrower irrevocably appoints Eurofin
International Ltd. at its office for the time being presently at Xxxxxxx
Xxxxxxx, Xxxxxx XX00 0XX, Xxxxxxx, to act as its agent to receive and
accept on its behalf any process or other document relating to any
proceedings in the English courts which are connected with this
Agreement.
|
50
|
29.5
|
Lender's rights
unaffected. Nothing in this Clause 28.4 shall
exclude or limit any right which the Lender may have (whether under the
law of any country, an international convention or otherwise) with regard
to the bringing of proceedings, the service of process, the recognition or
enforcement of a judgment or any similar or related matter in any
jurisdiction.
|
|
29.6
|
Meaning of
“proceedings”. In this Clause 28.4, “proceedings” means
proceedings of any kind, including an application for a provisional or
protective measure.
|
THIS AGREEMENT has been
entered into on the date stated at the beginning of this
Agreement.
51
SCHEDULE
1
DRAWDOWN
NOTICE
| To: |
Piraeus
Bank A.E.
|
|
00-00
Xxxx Xxxxxxx
|
|
|
000
00 Xxxxxxx
|
|
|
Xxxxxx
|
Attention: Loans Administration June 2008
DRAWDOWN
NOTICE
|
2
|
We
refer to the loan agreement (the “Loan Agreement”)
dated June
2008 and made between us, as Borrower, and you, as Lender, in connection
with a loan facility of up to US$35,000,000. Terms defined in the Loan
Agreement have their defined meanings when used in this Drawdown
Notice.
|
|
3
|
We
request to borrow the Loan as
follows:
|
|
(a)
|
Amount
: $[l];
|
|
(b)
|
Drawdown
Date: [l]
2008;
|
|
(c)
|
Duration
of the first Interest Period: [l]
months;
|
|
(d)
|
Payment
instructions :
[ ].
|
|
4
|
We
represent and warrant that:
|
|
(a)
|
the
representations and warranties in Clause 9 of the Loan Agreement
would remain true and not misleading if repeated on the date of this
notice with reference to the circumstances now
existing;
|
|
(b)
|
no
Event of Default or Potential Event of Default has occurred or will result
from the borrowing of the Loan.
|
|
5
|
This
notice cannot be revoked without the prior consent of the
Lender.
|
|
6
|
[We
authorise you to deduct the arrangement fee referred to in Clause 19.1
from the amount of the Loan].
|
……………………………….
for and
on behalf of
52
SCHEDULE
2
CONDITION
PRECEDENT DOCUMENTS
Part
A
The
following are the documents referred to in Clause 8.1(a).
|
1
|
A
duly executed original:
|
|
(a)
|
this
Agreement;
|
|
(b)
|
the
Guarantee; and
|
|
(c)
|
the
Accunt Pledge.
|
|
2
|
Copies
of the certificate of incorporation and constitutional documents of the
Borrower and the Owner.
|
|
3
|
Copies
of resolutions of the directors of the Borrower and of the directors and
shareholders of the Owner authorising the execution of each of the Finance
Documents to which the Borrower or the Owner (as the case may be) is a
party and, in the case of the Borrower, authorising named officers to give
the Drawdown Notice and other notices under this
Agreement.
|
|
4
|
The
original of any power of attorney under which any Finance Document is
executed on behalf of the Borrower and the
Owner.
|
|
5
|
Copies
of all consents which the Borrower or any Security Party requires to enter
into, or make any payment under, any Finance Document to which it is a
party and, in the case of the Owner, the
MOA.
|
|
6
|
The
originals of any mandates or other documents required in connection with
the opening or operation of the Earnings
Account.
|
|
7
|
Evidence
satisfactory to the Lender that each Owner is a direct or indirect
wholly-owned subsidiary of the
Borrower.
|
|
8
|
A
copy of the MOA and of all documents signed or issued by the Owner or the
Seller (or either of them) under or in connection with the
MOA.
|
|
9
|
Such
documentary evidence as the Lender and its legal advisers may require in
relation to the due authorisation and execution by the Seller of the MOA
and of all documents to be executed by the Seller under the
MOA.
|
|
10
|
All
documentation required by the Lender in relation to the Borrower and any
Security Party pursuant to the Lender’s “know your customer”
requirements.
|
|
11
|
Documentary
evidence that the agent for service of process named in Clause 28.4 has
accepted its appointment.
|
|
12
|
Favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of the Xxxxxxxx Islands and such other relevant
jurisdictions as the Lender may
require.
|
|
13
|
If
the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Lender.
|
53
PART
B
The
following are the documents referred to in Clause 8.1(b).
|
1
|
A
copy of the Initial Charterparty (showing a net charter rate of not less
than (i) $53,454 per day until 1 March 2009 (ii) $40,067 per day for the
12-month period commencing on 1 March 2009 and (iii) $26,575 per day for
the 12-month period commencing on 1 March 2010) and of all documents
signed or issued by the parties thereto under or in connection with the
Initial Charterparty.
|
|
2
|
A
duly executed original of the Mortgage, the Deed of Covenant, the General
Assignment, the Account Pledge and (if applicable) any Charter Assignment
for the Ship (and of each document to be delivered under each of
them).
|
|
3
|
Documentary
evidence that:
|
|
(a)
|
the
Ship has been unconditionally delivered to, and accepted by, the Owner
under the MOA and the full purchase price payable under the MOA (in
addition to the part financed by the Loan) has been duly paid, together
with a copy of the xxxx of sale and the other documents delivered by the
Seller thereunder;
|
|
(b)
|
the
Ship is definitively and permanently registered in the name of the Owner
under the Xxxxxxxx Islands flag;
|
|
(c)
|
the
Ship is in the absolute and unencumbered ownership of the Owner save as
contemplated by the Finance
Documents;
|
|
(d)
|
the
Ship maintains the highest available class with Det Norske Veritas (or
such other first-class classification society which is a member of IACS as
the Lender may approve) free of all overdue recommendations and conditions
of such classification society;
|
|
(e)
|
the
Mortgage has been duly registered against the Ship as a valid first
preferred ship mortgage in accordance with the laws of the Xxxxxxxx
Islands; and
|
|
(f)
|
the
Ship is insured in accordance with the provisions of this Agreement and
all requirements therein in respect of insurances have been complied
with.
|
|
4
|
A
copy of the Management Agreement and a duly executed original of the
Manager’s Undertaking in relation to the
Ship.
|
|
5
|
Copies
of:
|
|
(a)
|
the
document of compliance (DOC) and safety management certificate
(SMC) referred to in paragraph (a) of the definition of the ISM Code
Documentation in respect of the Ship and the Approved Manager certified as
true and in effect by the Owner;
and
|
|
(b)
|
the
ISPS Code Documentation in respect of the Ship and the Owner certified as
true and in effect by the Owner.
|
|
6
|
A
valuation (at the cost of the Borrower) of the Ship prepared by an
independent ship broker appointed or approved by the Lender, addressed to
the Lender, stated to be for the purpose of this Agreement and dated not
earlier than 15 days before the Drawdown Date showing the Market Value of
the Ship in an amount satisfactory to the
Lender.
|
54
|
7
|
A
favourable legal opinion from lawyers appointed by the Lender on such
matters concerning the laws of the Xxxxxxxx Islands and such other
relevant jurisdictions as the Lender may
require.
|
|
8
|
A
favourable opinion from an independent insurance consultant acceptable to
the Lender on such matters relating to the insurances for the Ship as the
Lender may require.
|
|
9
|
If
the Lender so requires, in respect of any of the documents referred to
above, a certified English translation prepared by a translator approved
by the Lender.
|
Every
other copy document delivered under this Schedule shall be certified as a true
and up to date copy by a director or the secretary (or equivalent officer) of
the Borrower or any other person acceptable to the Lender in its sole
discretion.
55
SCHEDULE
3
FORM
OF COMPLIANCE CERTIFICATE
| To: |
Piraeus
Bank A.E.
|
|
00-00
Xxxx Xxxxxxx
|
|
|
000
00 Xxxxxxx
|
|
|
Xxxxxx
|
[l] 200[l]
Dear
Sirs,
We refer
to a loan agreement dated [l] 2008 (the “Loan Agreement”) made between
(amongst others) yourselves and ourselves in relation to a term loan facility of
up to $35,000,000.
Words and
expressions defined in the Loan Agreement shall have the same meaning when used
in this compliance certificate.
We
enclose with this certificate a copy of the [audited]/[unaudited] consolidated
accounts for the Group for the [financial year] [3-month period] ended [l]. The
accounts (i) have been prepared in accordance with all applicable laws and GAAP
all consistently applied, (ii) give a true and fair view of the state of affairs
of the Group at the date of the accounts and of its profit for the period to
which the accounts relate and (iii) fully disclose or provide for all
significant liabilities of the Group.
We also
enclose copies of the valuations of all the Fleet Vessels which were used for
the purpose of calculating the Leverage Ratio as at [l].
The
Borrower represents that no Event of Default or Potential Event of Default has
occurred as at the date of this certificate [except for the following matter or
event [set out all material
details of matter or event]]. In addition as of [l], the Borrower confirms
compliance with the financial covenants set out in Clause 11.5 of the Loan
Agreement for the 3 months ending as of the date to which the enclosed accounts
are prepared.
We now
certify that, as at [l]:
|
(a)
|
the
Interest Coverage Ratio is [l]:[l];
|
|
(b)
|
the
Leverage Ratio is [l]:[l];
and
|
|
(b)
|
the
Liquid Funds are $[l], representing
$[l] per
Fleet Vessel,
|
as shown
in the attached calculation sheets.
This
certificate shall be governed by, and construed in accordance with, English
law.
______________________________
[l]
Chief
Financial Officer of
56
EXECUTION
PAGE
BORROWER
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SIGNED
by
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)
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for
and on behalf of
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)
|
|
)
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in
the presence of:
|
)
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LENDER
|
SIGNED
by
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)
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|
for
and on behalf of
|
)
|
|
PIRAEUS
BANK A.E.
|
)
|
|
in
the presence of:
|
)
|
57
SK 25767 0001
913561
